Apple Shifts iPad 2 Display Orders from LG to Samsung Due to Quality Issues

MacRumors · Aug 10, 2011

DigiTimes reports that 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. 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.

LGD's 9.7-inch panels for the iPad 2 reportedly failed to pass drop tests, during which their backlight units (BLUs) failed, the sources said, adding the panels' yield rates were unable to meet Apple's requirements.

While LGD is working on solutions, the maker's monthly shipment goal of four million units has become unlikely. July shipments of the 9.7-inch panels reached only 2.5-2.6 million units, the sources said.

Much of the slack appears to have been taken up by Samsung, which reportedly produced nearly two million iPad 2 display panels during the month of July, significantly higher than its usual monthly output of slightly over one million panels.

Problems at LG and competitive issues with Samsung could serve to benefit Chimei Innolux, which is attempting to increase its share of display production for the iPad 2. The company's close relationship with iPad manufacturing firm Foxconn could also drive more production to Chimei Innolux going forward.

Apple initially struggled to meet strong demand for the iPad 2, with production constraints resulting in lower than expected sales during the device's launch quarter. But shipments grew last quarter to over 9 million units as Apple's production finally ramped up to meet the demand, and just last week the company dropped shipping estimates for new iPad 2 orders to the minimum "within 24 hours".

Article Link: Apple Shifts iPad 2 Display Orders from LG to Samsung Due to Quality Issues

troop231 · Aug 10, 2011

I wonder how high they do the drop tests at?

840quadra · Aug 10, 2011

Interesting how a company that it is currently suing, is also the savior for the product for which they are suing to protect.

lesreaper2009 · Aug 10, 2011

840quadra said:
Interesting how a company that it is currently suing, is also the savior for the product for which they are suing to protect.

Exactly.

Can't wait to pick up Samsung's new S2 when Apple stops throwing a hissy fit.

appleguy123 · Aug 10, 2011

I hope the MacBook Air is next.

nerdo · Aug 10, 2011

Samsung made them an offer they couldn't refuse.

gnasher729 · Aug 10, 2011

840quadra said:
Interesting how a company that it is currently suing, is also the savior for the product for which they are suing to protect.

Clearly that is why Apple is suing Samsung in the first place - so Samsung can use all its capacity to build panels for Apple.

Ksizzle9 · Aug 10, 2011

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_10 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8E600 Safari/6533.18.5)

Yeah, as much of a apple fan as I am, If I was samsung I'd literally tell them "haha ****ing ha, h-****ing-a, good luck with LG, I'll now sue you, for sueing me, whom supplies all the major parts for your hottest selling items your company has ever made." A la iPhone processor, iPad processor, amongst many others. I know that's mumbo jumbo but that's a ballsy move by apple.

57004 · Aug 10, 2011

Cool that Apple does these drop test, so I don't have to find out the hard way with my own iPad. I never knew they did stuff like this.

the vj · Aug 10, 2011

840quadra said:
Interesting how a company that it is currently suing, is also the savior for the product for which they are suing to protect.

Politics: Samsung clearly could stop creating displays for Apple, on the other hand Apple is doing a gentlemen agreement:

"Do not copy our products but we are not going to kill you, we know is the fault of one of your departments, not the entire company".

You do not know when Apple may need or needed from Samsung. At the end, Apple is where it is as well because of the collaboration with their partners.

nwcs · Aug 10, 2011

Makes perfect sense. Samsung's LCD manufacturing is a separate entity from the corporate parent. And it's totally normal for companies suing each other to still work together. It'd be petty and amateurish to do otherwise. And neither company got to their current size by acting stupid.

xionxiox · Aug 10, 2011

Ksizzle9 said:
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_2_10 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8E600 Safari/6533.18.5)

Yeah, as much of a apple fan as I am, If I was samsung I'd literally tell them "haha ****ing ha, h-****ing-a, good luck with LG, I'll now sue you, for sueing me, whom supplies all the major parts for your hottest selling items your company has ever made." A la iPhone processor, iPad processor, amongst many others. I know that's mumbo jumbo but that's a ballsy move by apple.

And Samsung would lose millions of dollars from their biggest customer.

nagromme · Aug 10, 2011

I want that iPad drop-testing job! I would invent all kinds of awesome new trick shots. Behind the back! Eyes closed! Mid-air collision! That sounds like too much fun.

Samuriajackon · Aug 10, 2011

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Apple fans are the only people i know who tracj where the componets for the product are made from... Well them and car fanatics.

Shrink · Aug 10, 2011

nwcs said:
Makes perfect sense. Samsung's LCD manufacturing is a separate entity from the corporate parent. And it's totally normal for companies suing each other to still work together. It'd be petty and amateurish to do otherwise. And neither company got to their current size by acting stupid.

That ^^^

And Samsung is making beaucoup $ making s*** for Apple.

*LTD* · Aug 10, 2011

Shrink said:
That ^^^

And Samsung is making beaucoup $ making s*** for Apple.

This.

Funny that we have to keep repeating this, isn't it?

Yes, we talk a lot about the hypotheticals, which is enjoyable, but some folks actually think Samsung would somehow exact "revenge" on Apple by messing with supply, deadlines, etc. It just isn't how things work in the real world.

KnightWRX · Aug 10, 2011

This just goes to prove one thing : The only people getting emotional over lawsuits are the forum dwellers. For companies, it's business as usual.

Morod · Aug 10, 2011

This is good news. I'd take a Samsung product over an LG product any day!

840quadra · Aug 10, 2011

the vj said:
Politics: Samsung clearly could stop creating displays for Apple, on the other hand Apple is doing a gentlemen agreement:

"Do not copy our products but we are not going to kill you, we know is the fault of one of your departments, not the entire company".

You do not know when Apple may need or needed from Samsung. At the end, Apple is where it is as well because of the collaboration with their partners.

Oh I understand what's going on in some regards. All things in balance. I just found humor that the two recent articles show how important these two companies are to each-other.

It is also likely that the division / department responsible for making the Samsung tablets is totally separate from the group making the panels themselves.

GenesisST · Aug 10, 2011

KnightWRX said:
This just goes to prove one thing : The only people getting emotional over lawsuits are the forum dwellers. For companies, it's business as usual.

It's not personal, it's just business. A bit like the kings/tzar/Kaiser or WW1 that were still keeping in touch during war time.

Kaiser: Dude, 'sup?
George: Man, what's up with that mustard gas?
Kaiser: yeah, I know, messy stuff.
George: Yours is French's, I already did it with Grey Poupon, I'll send my lawyers in.
Kaiser: Whatever... How's the wife?
George: Good, and yours?

(Historically inaccurate...)

*LTD* · Aug 10, 2011

the vj said:
Politics: Samsung clearly could stop creating displays for Apple,

No. This isn't in the realm of reality.

Samsung, in fact, has relatively little choice in the matter, especially given their dismal numbers last quarter - it was a pretty embarrassing showing for them. Apple is big business for Samsung and frankly, they need all the business they can get, especially in the display segment.

Squall Strife · Aug 10, 2011

I Hope Imac 27" is next...those LG panels are crap since the October 2009 release!!!!

AZREOSpecialist · Aug 10, 2011

Samsung makes far more money by selling LCD displays to Apple than it does making tablets. If Samsung loses its lawsuit with Apple, it's still one of Apple's biggest component suppliers.

AppleFan1984 · Aug 10, 2011

AZREOSpecialist said:
Samsung makes far more money by selling LCD displays to Apple than it does making tablets.

In a single quarter perhaps, but over the long term finished products generally have much higher margins than components, which is why so many components makers also produce consumer products.

Navdakilla · Aug 10, 2011

nwcs said:
Makes perfect sense. Samsung's LCD manufacturing is a separate entity from the corporate parent. And it's totally normal for companies suing each other to still work together. It'd be petty and amateurish to do otherwise. And neither company got to their current size by acting stupid.

Exactly, these are HUGGEEEE companies. They are only suing based on patent infringdements, has nothing to do with "I hate you" "I hate you".
They can be suing based on one thing, yet be working together on another

Apple Shifts iPad 2 Display Orders from LG to Samsung Due to Quality Issues

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