Apple (AAPL) Reportedly Set To Invest In LG's OLED Factory

Per media reports, Cupertino-based tech giant, Apple Inc (NASDAQ:AAPL) , is considering investing $1.75–$2.65 billion in the new organic light emitting diode (OLED) screen production factory of LG Electronics. The investment will ensure LG’s special commitment to Apple’s OLED screen demand.

OLED display is being increasingly adopted as it comes with improved brightness, contrast and efficiency compared with LCD or Plasma displays. Television sets have long been equipped with OLED displays. Smartphones are fast catching up now.

Apple has already been using OLED in its Watch for a while now. Hence, it was only a matter of time before Apple adopted it for its larger products – iPhone and iPad. Having an OLED will not only enhance the iPhone display by making the contrast much more enhanced but will also reduce costs as there will be no need for backlights.

Apparently, Apple intends to add OLED display to all its iPhones by 2019. At present, Apple phones do not have OLED screens. The rumored iPhone 8 will be the first iPhone to feature the screen. Per reports, Apple has ordered 70 million OLED screens from Samsung Electronics (KS:005930).

Samsung is the dominant player in this field with reportedly 95% market share. A few days back it was widely reported that to keep its lead in this lucrative market, Samsung will be setting up a huge OLED screen manufacturing facility. The factory, awaiting board approval, will be set up in South Korea at a cost of 16 trillion won and could start production by 2019.

Despite Samsung’s dominance, other players are fast making foray in this arena. Fellow South Korean tech giant, LG, is looking to set up an OLED production factory named E6, which will target about 30K units initially. The production is expected to begin in early 2019.

Zacks Rank & Stock Price Movement

At present, Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past one year, shares of Apple have registered growth of 50.21% compared with the Zacks categorized Computer Miniindustry’s gain of 49.42%.

Stocks to Consider

Better-ranked stocks in the broader tech space include Cypress Semiconductor Corporation (NASDAQ:CY) , Quantum Corporation (NYSE:QTM) and Marvell Technology Group Ltd. (NASDAQ:MRVL) , all sporting a Zacks Rank #1.

Cypress, Quantum, and Marvell have delivered average positive earnings surprise of 83.30%, 43.75% and 86.70%, respectively in the trailing four quarters.

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