Hon Hai to use more capacity for OLED iPhone production

Taipei--Taiwan-based Hon Hai Precision Industry Co. (??) is expected to assign more production capacity for the next-generation iPhones with an advanced organic light-emitting diode (OLED) screen, to meet expected strong demand, according to a research note released Wednesday.

In the note, Taipei-based KGI Securities analyst Kuo Ming-chi (???), who is regarded as one of the most reliable analysts who follow Apple Inc., said that Hon Hai is expected to assign some of its production lines in its Zhengzhou plant in China's Henan Province to assemble more of the new OLED iPhones.

As the iPhone marks its 10th anniversary, the market has widely anticipated that the new iPhones will have a significant upgrade in specifications, including the use of OLED displays, to diversify its supply from the existing LCD iPhones, which could spark a wave of replacements.

Kuo said that Hon Hai, one of the most important assemblers of iPhones, is expected to start converting some of its production lines in the Zhengzhou plant for the new OLED iPhones at the beginning of the fourth quarter of this year.

The analyst said that the OLED iPhones are scheduled to enter the production verification test stage at the end of August, before going into commercial production in September.

According to Kuo, the OLED iPhones will be equipped with a 5.2-inch or 5.8-inch display.

In addition to the OLED iPhones, the new iPhones will also include a 4.7-inch LCD model and a 5.5-inch LCD model, Kuo said in the research note, adding that the three versions will be available in three colors -- black, silver and gold.

According to the research note, Apple will kick off commercial production of the new OLED iPhones, which could be called the iPhone 8, in mid-September on a small scale, with production expected to increase significantly in the fourth quarter.

Kuo said that commercial production of the two new LCD iPhone models is already under way.

Other market analysts said that Hon Hai is expected to receive 90 percent to 95 percent of the orders placed by Apple to assemble the OLED version of the new iPhones, while the new iPhones are expected to carry a starting price tag of US$1,000.

Kuo said that shipments of the OLED iPhones are expected to range between 45-50 million units, while shipments of the 4.7-inch LCD iPhones could hit 35-38 million units and shipments of the 5.5-inch LCD iPhones are likely to range between 18-20 million units in 2017.

Despite the KGI Securities research report, shares of Hon Hai fell 2.48 percent to close at NT$118.00 (US$3.91) on the Taiwan Stock Exchange Wednesday, when the regional markets were rattled by geopolitical tensions.

Source: Focus Taiwan News Channel