LG and Samsung Display are close to a final agreement with Apple for the screens, the Electronic Times report said, adding the two Korean firms plan a combined 15 trillion won ($12.8 billion) in capital expenditure to build up OLED production capacity over the next two to three years.
Reuters goes on to say Apple will likely provide a portion of the funding to both firms to help with their investments. Reuters says LG Display and Samsung Display declined to comment on the report, while Apple could not be immediately reached for comment.
The report is just the latest to indicate that Apple will begin using OLED screens for its iPhone handsets in 2018. Industry analyst Ming-Chi Kuo recently indicated Apple would use IPS panels for its handset through 2017.
OLED displays, while offering better technology than IPS displays, also have their own drawbacks. The panels offer thinner displays, with deeper blacks. OLEDs are used in the Apple Watch.
OLEDs also offer better power efficiency than IPS technology, but only when the majority of the content is black. The displays also offer more vivid colors, but can make photos appear over saturated.
Major issues with OLED displays are the higher manufacturing costs, a shorter lifespan, and lesser brightness levels than LCD displays.
Reuters indicates Samsung Display, which is currently supplying OLED smartphone panels to its parent, Samsung Electronics, and a number of Chinese vendors, will likely get a bigger piece of the OLED production action from Apple than LG Display.