Samsung Gets Big Order for iPad Displays

By Kim Yoo-chul
Staff Reporter

Samsung Electronics has received a large order for displays that will be used in Apple Inc.'s tablet-style iPad, industry sources said Thursday.

The deal is expected to be worth $240 million, they added.

The iPad model featuring Wi-Fi wireless connectivity will be available in Apple's U.S. stores from April 3.

And the model offering both Wi-Fi and 3G connectivity will debut in late April in nine countries, including Japan and the United Kingdom, as well as the United States, the California-based consumer electronics company said.

The iPad has a 9.7-inch color LCD screen.

The cheapest iPad model, with Wi-Fi connectivity and 16GB of memory, is $499. The most expensive model with 3G connectivity and 64GB of memory will cost $829.

"Samsung Electronics has won a contract worth $240 million from Apple to supply 3 million LCD panels used in the iPads," a high-ranking industry representative told The Korea Times, asking not to be identified.

"The most expensive component in the iPad is the display and touch-screen interface that costs $80 for all models. The 9.7-inch display is more than twice the size of the iPhone 3GS screen and costs five times as much," he said.

However, he declined to elaborate further, citing the sensitivity of the issue.

According to executives from Samsung Electronics and LG Display, the iPad touch-screen is mainly made by LG Display and Chimei Innolux Corp., which was created from the merger of Taiwan-based LCD makers Chi Mei Optoelectronics, Innolux Display and TPO displays.

A U.S-based brokerage Morgan Stanley expects iPad sales to reach 6 million by the end of this year from an earlier market consensus of between 3 and 4 million.

A Samsung Electronics spokesman wasn't available for comment, while representatives of Apple's South Korean branch also remained mum.

Separately, Samsung Mobile Display ― a flat-screen joint venture between Samsung Electronics and Samsung SDI ― has been in deep talks to supply its LCD panels for Apple's upcoming 4G iPhones and iPads, a company executive told the newspaper.

"As far as I know, Apple will use the LCD panels for its next iPhone models. We are receiving related orders from Apple," the executive said, without elaborating further.

Samsung is also a key supplier of NAND flash memory chips to Apple along with Toshiba of Japan and Hynix Semiconductor.

The LCD orders came a few months after Samsung's biggest cross-town rival, LG Display, struck an $800 million deal with the U.S. company to supply 10 million LCD panels for the iPads.

LG Display CEO Kwon Young-soo said in an earlier shareholders' meeting that its in-plane switching (IPS) technology was the main reason that Apple has continued to buy a large number of the LCD panels for the iPads.

IPS Technology

Officials at Samsung Electronics and local display industries said the world's top LCD panel maker plans to ramp up the production by adopting the IPS technology that is favored by Apple.

In comparison with vertical alignment (VA) technology, IPS isn't as sharp in terms of lighting, but has a broader view and faster response.

Samsung Electronics and Sony Corp of Japan apply the VA technology to their LCD panels, while LG Display has embraced the IPS technology.

"As far as I know, Samsung has been in the development phase in order to ship more IPS-similar panels to the American company," a representative at Samsung's LCD complex in southern Seoul said.

Apple said the 9.7-inch, LED-backlit display features IPS technology to deliver clear images and consistent color with a 178-degree viewing angle.

Apple hires manufacturing specialists, mainly companies from Taiwan that have extensive operations in China, to assemble its gadgets. They use components from other outside suppliers, many of which also are from Taiwan and elsewhere in Asia.

According to a research firm iSuppli Corp. the global consumer electronics market is expected to see a mild recovery in 2010, after a 6.7 percent drop in 2009, with revenue expanding 1.6 percent partly because of improving sales of LCD TVs and other digital appliances.

yckim@koreatimes.co.kr