Apple has been forced to shift some of its orders for iPad 2 display panels from LG Display to Samsung and Chimei Innolux after quality issues at LG resulted in unacceptable yields with the panels failing to pass drop tests and also Apple has reportedly suspended new display orders with LG, which had been the largest panel supplier for the iPad 2, until the issues can be addressed. The iPad 2 demand far out-paced LGD’s ability to produce quality screens and Samsung has doubled its iPad 2 screen production forecast from 1 million units to 2 million units……………..
Apple has reportedly suspended new orders for iPad 2 panels with LG Display and move to rivals Samsung and Chimei Innolux after the display manufacturer’s recent shipments to Apple experienced quality issues, Digitimes has revealed. According to industry sources, LG’s panel shipments in July were a million units short of its original monthly goal, despite moving operations to its 6G LCD plant to produce the 9.7-inch panels for Apple’s tablet devices in the second quarter of 2011. The company had planned to up production from 3 million units in the second quarter to 4 million units in the third. As a result, the sources believe LG’s revenues in the third quarter are likely to be impacted, as Apple has suspended new orders and turned to its rivals to meet demand. The issue seems to revolve around the failure of drop tests, which saw the backlight units fail. Digitimes says that Apple’s competition with Samsung could see orders limited:
However, Samsung’s Galaxy Tab has head-on competition with the Apple iPad 2 in the end market. This would prevent Apple from sourcing more panels from Samsung, the sources added.
CMI was certified as one of the panel suppliers for the iPad 2 in second-quarter 2011 and has geared up for production since then. The maker shipped a little over 450,000 units of iPad 2 panels in Jul, the sources said.
Apple is also embroiled in a legal fight with Samsung over claims that the Korean vendor has copied iPhone and iPad designs. Samsung has been forced to stop sales of its Galaxy Tab 10.1 device in Australia and Europe. Samsung may see this as an opportunity to increase revenue in the short-term, as it fights Apple in the courts.