TAIPEI -- Apple is planning to adopt advanced micro-LED display technology in its wearable devices, industry sources say, with one suggesting that could happen as soon as 2018.
This fuels speculation about whether Apple will cut dependence on Samsung Electronics, the only company in the world that can make curved smartphone screens using advanced organic light-emitting diode technology. Samsung is also Apple's main rival in the global smartphone market.
The U.S. titan is relying solely on the South Korean conglomerate for curved OLED panels for its premium iPhone 8 handsets that are coming out later this year.
Apple typically has a number of suppliers rather than depend on one single company for a key component. Furthermore, screens are almost always the most expensive part of an electronic product.
"Apple is working very hard to foster the micro-LED technology ... the company could push the use of new display tech as early as next year," said an executive with close knowledge of display technology.
"At this point, Apple is the only company who is able to roll out micro-LED, a technology that is still at an early stage of development, and cover the high costs incurred by the low yield rate," the person said.
Yield rate refers to the number of usable units in a batch of manufactured products. With a component that is adopting new technology for the first time, yield rates tend to be low and lead to high costs for companies.
The executive said that it was still unlikely for micro-LED to go into smartphone soon as there were still a lot of technical issues to overcome. iPhone remains the key source of revenue for Apple, accounting for over 60% of the U.S. tech titan's revenue.
Apple did not immediately respond to an email request for comment.
One of Apple's key facilities dedicated to the development of micro-LED technology is in the Longtan district in the northern Taiwanese city of Taoyuan, the person added.
Apple bought the facility from Qualcomm in 2014. The chipmaker once used the location to develop Mirasol display technology for e-readers, but eventually gave up on the project after it failed to secure significant market share.
Another executive working within the Apple supply chain confirmed that Apple will be adopting micro-OLED for wearables, although he could not say when.
The company uses OLED screens from LG Display for the gadget. It is unclear whether Apple will introduce other wearable products in the near future.
Market watchers began speculating that Apple was planning to build its own new display technology when it took over micro-LED display maker LuxVue Technology.
But since the acquisition, there has not been much progress in Apple's micro-LED efforts.
Instead, Apple decided last year to opt for Samsung's OLED technology to make curved screens for the upcoming iPhone 8, helping turn the South Korean conglomerate's advanced display technology into the industry standard.
Apple's move to create next-generation display tech appears to be part of its efforts to slash its reliance on Samsung Electronics as early as possible, according to Roger Chu, an analyst at research institution LEDinside.
OLED provides sharper color contrast compared with the current LTPS, or low-temperature polycrystalline silicon, screens adopted by iPhones, and their flexibility allows manufacturers to create curved and even foldable screens in the future.
Curved OLED screens have so far been used in Samsung Galaxy S7 and S8 phones, and a small number of premium Chinese smartphones.
Micro-LED can also provide brighter color contrast, as it does not blur under sunlight, and it can be more power-efficient than existing display technologies.
Also, micro-LED panels can be flexible and even foldable like OLED ones.
The key affiliates of Key iPhone assembler Hon Hai Precision Industry, or known as Foxconn Technology Group, invested in an American micro-LED startup eLux this past May.
"With micro-LED, Apple is looking to bestow brand-new products with unique designs to really differentiate itself from rivals such as Samsung," said Eric Chiou, an analyst at Taipei-based research company WitsView.
However, Chiou said it was unlikely for micro-LED to be mature enough be used in smartphones for years or surpass OLED's position as the leading premium display technology before 2020.
Some 50% of smartphones by 2020 will have OLED displays and Samsung will still be the no.1 supplier that control some 50% of global capacity. This despite LG Display's ability to start supplying to some Chinese smartphone brands by the end of this year and to Apple beginning next year, according to Chiou.
Taiwanese companies such as Taiwan Semiconductor Manufacturing Co., Epistar, Innolux, and AU Optronics are all supporting and assisting Apple in some way to help the development, according to LEDinside's Chu.
But Chu noted it was not decided which companies supply micro-LED to Apple as a lot of equipment and materials are not quite ready yet.