A new analyst report has revealed that Wintek, the current supply chain partner for Apple’s touch panels is experiencing a steep decline in sales. The report states that Wintek has experienced one of its steepest declines on record. The report also states that the decline is certainly not down to poor demand for Apple products but more likely a sign that Apple has changed technology for its panels; most likely to in-cell panels for the next iPhone.
This morning, Wintek reported consolidated June sales of NT$5.22 billion, down 33.6% MoM and much worse than the average MoM June sales increase of 1% over the past seven years. Based on our records, this appears to be the biggest MoM sales drop for Wintek since the later part of 2008 and one of the most significant drops we have on record (back to 2005). We would not overreact to the weakness at Wintek as it relates to Apple because we believe Wintek may be losing market share in key next generation Apple products and therefore ramping down certain programs.
It has been rumored before that Apple would be switching its touch panels to the new in-cell display panel technology. Current iPhone capacitive screens require a touchscreen to be fitted outside of the LCD, this means an additional layer of sensing glass which of course increases the thickness but also adds an extra step in the lamination process. Should Apple choose to use this new in-cell technology, it would offer better yield rates, reduced manufacturing costs as well as produce slimmer and lighter devices. That additional space could help Apple to increase its battery capacity and add in that much desired LTE radio.