News out of Korea has Apple awarding its newest iPad Pro OLED business to the Korean giants in both 10.9 in and 12.9 in configurations.
The next generation of iPad Pros are unlikely to be available this year, it may be as far out as 2025 before we see any significant volume, although you never know with Apple, which subsists on a diet of will it or won’t it in 2023 news these days. Currently, the company is using a traditional IPS LCD panel with miniLEDs backlighting in its iPad Pros, and hasn’t had much complaint from its target audience, a very particular set of creative types.
However, it is likely moving to OLED panels for iPad Pros and laptops. There really isn’t much difference between Apple’s higher end tablets and its lower end laptops once you take out the touchscreen feature. You end up spending about the same for an iPad with a stylus as you would for a MacBook Air without any trimmings – don’t quibble, it’s close enough. Knowing that the company is consolidating a lot of the processes in its supply chain, anticipating the impact of US sanctions on China, and generally building to specifications to keep its products’ premium pricing relevant during a tough economic climate, you can see why BOE may be losing out on this one. It makes sense for Apple to secure capacity in Korea, and it is probably getting a reduced rate as it helps Samsung and LG transition to 8th Gen production lines.
There may also be something to that last point: 8th Gen deposition machinery is coming out of Japan, costs multiples more than previous generations of production equipment, and is going to get to Korea from Japan before it gets to China. Warren Buffet’s Berkshire Hathaway reduced its position dramatically in TSMC only last week, and raised its investment in Apple, by far its largest holding. The speculation was that it was over concerns with the amount of cash the company will have to invest in its factories, even though it probably has a unique position in 3 nm processes, and the bite that sanctions will take out of the business, despite the company having Nvidia, AMD, and Qualcomm as customers. Whatever the reasons, the real impact was on perceptions about shifts in manufacturing to other countries. It looks like whatever capacity there may be for next generation OLED manufacturing, outside of China, Apple is lining up to manage first mover advantage and that’s going to be all in Korea. It’s not necessarily the end of the world for Chinese companies, but just a lot of pain for a long time.
