LG allegedly wants compensation from Apple for failed micro-LED project
According to a report from Korea, Apple's failed project to introduce innovative screens has had consequences. LG probably wants some of its investment back.
Apple Watch Ultra: Micro-LEDs should have been installed here first.
(Image: Apple)
Apple's decision not to use micro-LED screens for the Apple Watch initially, and later for other products, apparently has economic repercussions in connection with its important partner LG Display from South Korea. According to a report by The Elec, an electronics trade journal published in the country(summary at Patently Apple, original currently offline), the Apple supplier has spent hundreds of billions of won on building up production capacity, buying patents and relocating equipment that is now worth nothing.
Trouble in the supply chain
According to the report, for example, 14 patents in the field of micro LED technology were acquired by Ultra Display. Capacities were created for the necessary backplane processes, experts were hired to start a micro LED task force and agreements were concluded with suppliers who are now no longer needed and could in turn incur costs themselves and sue LG Display. According to The Elec, LG Display is said to have demanded compensation from Apple. It remains unclear what amounts are involved - and whether parts of it will also go to LG Display's suppliers.
It is also unclear whether LG Display has any legal chance of receiving compensation payments. Allegedly, the contract with Apple was ultimately missing, even though the company is said to have already made promises. However, as LG Display is one of Apple's most important suppliers alongside Samsung Display and manufactures panels for various products, Apple is likely to have an interest in not jeopardizing the relationship. The original plan was to replace the OLED screens currently installed in the Apple Watch with micro-LED screens, which promise good colors with low power consumption. However, Apple apparently no longer saw sufficient value in this and initially discontinued the project.
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Problems in Europe too
The end of micro-LED technology for Apple products also caused difficulties in the supply chain in Europe. This affected the supplier AMS-Osram, among others, which also suffered economic damage.
The German-Austrian company is said to have laid off 500 employees, mainly in Malaysia, and the cost of phasing out micro-LED technology is said to have cost AMS-Osram a total of 700 million euros.
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(bsc)
