Executive Briefings

Search for Better iPhone Screens Leads to Japan's Rice Fields

Apple's quest to adopt advanced displays for its next-generation iPhone hinges on a single supplier in the Japanese countryside.

Search for Better iPhone Screens Leads to Japan's Rice Fields

Canon Tokki Corp., surrounded by rice fields in the city of Mitsuke in Niigata prefecture, has a near monopoly on the machines capable of making screens with organic light-emitting diodes, which enable sharp, vibrant displays that use less energy. The Canon Inc. unit with 343 employees has spent more than two decades perfecting the manufacturing equipment used by OLED screen makers.

But there’s a problem: Canon Tokki has a growing backlog even after doubling output in 2016. The potential production bottleneck is raising questions over Apple’s ability to feature OLED displays in next year’s iPhones, and whether the Cupertino company will be able to line up additional suppliers. The current wait for a machine, which can cost more than $85m, is about two years.

“We are doing all we can to increase output and make that wait shorter,” said CEO Teruhisa Tsugami, adding that demand from display makers, including Samsung Display Co., LG Display Co. and Sharp Corp., will remain strong for the next three years.

Apple has been making preparations to outfit its next iPhone with OLED displays, the latest chapter in its now-familiar strategy of tempting people to upgrade by offering new features. Over the years, the improvements have included sharper screens, fingerprint identification, pressure-sensitive displays and custom-designed chips.

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Canon Tokki Corp., surrounded by rice fields in the city of Mitsuke in Niigata prefecture, has a near monopoly on the machines capable of making screens with organic light-emitting diodes, which enable sharp, vibrant displays that use less energy. The Canon Inc. unit with 343 employees has spent more than two decades perfecting the manufacturing equipment used by OLED screen makers.

But there’s a problem: Canon Tokki has a growing backlog even after doubling output in 2016. The potential production bottleneck is raising questions over Apple’s ability to feature OLED displays in next year’s iPhones, and whether the Cupertino company will be able to line up additional suppliers. The current wait for a machine, which can cost more than $85m, is about two years.

“We are doing all we can to increase output and make that wait shorter,” said CEO Teruhisa Tsugami, adding that demand from display makers, including Samsung Display Co., LG Display Co. and Sharp Corp., will remain strong for the next three years.

Apple has been making preparations to outfit its next iPhone with OLED displays, the latest chapter in its now-familiar strategy of tempting people to upgrade by offering new features. Over the years, the improvements have included sharper screens, fingerprint identification, pressure-sensitive displays and custom-designed chips.

Read Full Article

Search for Better iPhone Screens Leads to Japan's Rice Fields