Apple Supplier's Plans Fall Through, Macs and iPads May Be Impacted

On an earnings call on Tuesday, Japanese company Sharp announced that the planned sale of one of its LCD display factories to its majority owner Foxconn has fell through, according to Nikkei Asia. As a result, the report said Sharp plans to halt production at the facility in August, and this decision may temporarily impact Apple.

If production ceases at Sharp's so-called "K2" factory in Kameyama, Japan, Taiwanese research firm TrendForce said that short-term supply of oxide LCD display panels for some MacBook and iPad models "could face disruption."

Apple is known for having excellent supply chain management, so any potential impact on MacBook and iPad shipping estimates might be limited. TrendForce estimated that Apple's current orders only make up about 16% to 17% of the factory's overall utilization, and Apple still has around six months to prepare.

Sharp has decided to wind down the factory amid increased competition.

"The plant's competitive edge once stemmed from its industry-leading oxide backplane technology, serving as a benchmark for Apple's MacBook and iPad panels," said TrendForce. "However, increasing investments from Korean and Chinese panel makers in oxide capacity steadily eroded Sharp's technological advantage."

Foxconn had initially planned to continue LCD panel production at the factory, and add new production lines to build AI servers, according to Nikkei Asia. However, the report said Foxconn backed away due to "weak LCD prices."

Regardless, Apple is in the process of upgrading its products with OLED displays. All of the latest iPhone models are equipped with OLED displays, and the past two generations of iPad Pro models are too. Over the next one to two years, the iPad mini, iPad Air, MacBook Pro, MacBook Air, and iMac are expected to receive OLED displays too.