South Korean media: "Chinese component manufacturers are breaking into the iPhone supply chain!" On April 19, South Korean newspaper The Herald Economy published an article stating that as Apple accelerates the diversification of its supply chain for components such as display panels and camera modules, South Korean electronic component companies are beginning to feel nervous. As Chinese enterprises continue to attempt entry into Apple's supply chain, LG Display and LG Innotek, which have particularly high dependence on Apple, plan to surpass them by ensuring ultra-differentiated technology and cost competitiveness. According to market research firm Omdia, last year in the high-end smartphone panel "low-temperature polycrystalline oxide (LTPO) OLED" market, South Korea's share (based on sales) was 74.3%, which is about three times that of China (25.6%). However, based on a strong domestic market, China is vigorously developing and mass-producing OLED panels, gradually narrowing the gap with South Korea. Within one year, its market share rose from 15% in 2023 to over 25%. LTPO OLED is a panel featuring low power consumption and high resolution, mainly used in high-end smartphones. It is more difficult to manufacture than general products "low-temperature polycrystalline silicon (LTPS) OLED" and offers higher profits. Apple has adopted LTPO OLED only in the high-end models Pro and Pro Max of its latest product line, the iPhone 16 series. The regular model and Plus use LTPS OLED. It is reported that Samsung Display and LG Display are responsible for all supplies for the Pro series. On the other hand, BOE, the largest display company in China, has not yet supplied LTPO OLED for iPhones but provides panels (LTPS OLED) for regular and Plus models. Unlike Samsung Display, which supplies OLED for all Galaxy smartphones and the entire iPhone series, LG Display is increasing its market share by focusing on the profitable Pro and Pro Max models. Last year, LG Display's market share in the smartphone LTPO OLED market reached 28.9%, more than quadrupling compared to 2022 (6.3%). Since LG Display's smartphone OLED business targets a single customer (Apple), analysis suggests that Apple's efforts to diversify suppliers to reduce panel prices, along with BOE's potential future entry into the iPhone LTPO OLED market, could pose a threat. A South Korean industry insider said, "BOE has been trying to enter the iPhone Pro series supply chain for many years. Although it hasn't succeeded yet, BOE has already provided OLED screens for some iPhone models, which indicates a certain level of recognition from Apple. Therefore, we cannot completely rule out the possibility of entering the high-end model supply chain in the future." The situation with camera modules is similar. LG Innotek supplies high-value-added camera modules for high-end iPhone models. Over 80% of the company's total sales come from its optical solutions department, which is responsible for camera module operations. Because of this, LG Innotek has extremely high dependence on Apple, meaning its annual performance is significantly influenced by the success of new iPhone launches each fall. Meanwhile, as Chinese enterprises began entering the camera module supply chain starting from the iPhone 16 series last year, LG Innotek's supply volume has decreased due to monopolization. Price competition has also led to a decline in profitability. According to the 2024 operating report, the operating profit of the optical solutions department was 596.6 billion won, a decrease of approximately 10% compared to the previous year (661.2 billion won). Industry insiders stated, "Apple is seeking to assign some camera modules to Chinese enterprises to diversify its supply chain. Although LG Innotek still leads in yield rate, it cannot be complacent." [Image: //p3-sign.toutiaoimg.com/tos-cn-i-ezhpy3drpa/437ebea87ffc4d95ba0033135f78deb0~tplv-obj:1920:1080.image?_iz=97245&bid=15&from=post&gid=1829825290872067&lk3s=06827d14&x-expires=1752796800&x-signature=IiaYRTL0kxVvxEUK8Dbfp8KnYD0%3D] Original source: https://www.toutiao.com/article/1829825290872067/ Disclaimer: This article solely represents the author's personal views.