Chinese screen manufacturer BOE could lose up to 30 million orders from Apple to manufacture screens for the upcoming iPhone 14 due to fraud in the iPhone 13 screen design.
BOE ranked third in Apple's supply chain, after Samsung and LG. But it was still hoping to produce up to 40 million OLED screens this year for a range of iPhone models.
The company was struggling to buy enough screen drivers chips. It also suffered from low production rates - percentage of units pass the quality control check.
Return rates are always a challenge for Apple's suppliers, as the company's specifications are often tighter than those set by other smartphone makers.
Clearly, BOE was suffering from such low returns that it decided to cheat, by lowering specs across its iPhone screens.
Apple commissioned BOE to make the iPhone 13 screens last October. But too many of the company's monitors fail quality control checks. BOE tried to solve this problem by changing the specifications without telling Apple.
But the deal ended when Apple caught BOE changing the circuit widths of film transistors across the OLED panels it made for the iPhone 13 earlier this year, making them thicker, and therefore easier to manufacture.
This modification was made without Apple's approval. As a result, BOE was unable to receive any orders from Cupertino for OLED panels across the iPhone 14 . series
The Chinese company sent a CEO and employees to Apple headquarters after the accident to explain why the circuit widths of the transistors were changed.
They also asked the iPhone maker to approve the production of OLED panels for the iPhone 14. However, they did not receive a clear response from them.
And it appears that the Cupertino company is willing to place an order for the 30 million OLED panels, which it intended to give to BOE before the accident, to Samsung and LG instead.
The panel makers are likely to start production next month at the earliest. BOE has not yet received approval from Apple to manufacture OLED panels for the upcoming iPhone 14 series smartphones.
BOE has not yet received Apple's approval
BOE was seeing a decline in the number of OLED panels it made for Apple during the first half of the year due to a shortage of display driver integrated circuits and the main chips needed for the panels.
Meanwhile, Samsung is expected to make 6.1-inch and 6.7-inch screens for the iPhone 14 Pro models. These displays use LTPO thin-film transistors.
While LG provides the panels for the iPhone 14 Pro Max models of 6.7 inches. Apple is supplying LTPO TFT OLED panels for the first time this year.
BOE previously only made screens for refurbished iPhones. They also manufacture LCD screens for iPads. Apple later hired them to supply OLED screens for the new iPhone in 2020. But the first set of panels failed to pass Apple's rigorous quality control tests.