Novatek, a major driver IC manufacturer in Taiwan, entered the iPhone 16 supply chain early this year and secured certification ahead of its competitor LX Semi. However, according to a report from Commercial Times citing sources, its Korean competitor, LX Semi, recently also obtained certification and, with strong support from foundries, is challenging Novatek’s exclusive supply position.

The same report continues to cite sources indicating that LX Semi remains the exclusive supplier for iPhone 16 Pro/Pro Max’s LG Display (LGD) OLED screens in the second half of the year, with significant acceleration in chip production starting in September. It is estimated that the order allocation between Novatek and LX Semi will be 55:45.

Industry sources cited by Commercial Times reveal that LX Semi has a closer partnership with leading foundries, compared to Novatek’s previous strategy of relying on established foundries. Reportedly, another sources confirms as well that LX Semi has recently been certified and, with support from foundries, will begin significant wafer production by the end of the third quarter.

Other industry sources cited by the report further pointed out that Apple’s OLED panels are supplied by Korean manufacturer LGD, while LX Semi was originally LG Group’s subsidiary. Therefore, after LX Semi obtained certification, they increased orders from LGD, thereby reducing the originally planned procurement of OLED driver ICs from Novatek. However, for Novatek, they still heavily rely on Apple orders. If shipments go smoothly, they are expected to further secure opportunities in other product lines, such as iPad OLED DDIs and Apple Watch.

Yet, concerns are also noted, as the report brought up that the momentum in TV applications accompanying sports events is expected to slow down. Additionally, subdued sales during China’s 618 shopping festival and a conservative attitude among brand manufacturers in the second half of the year may affect demand for components like DDICs.

Therefore, Novatek keeps investing in establishing OLED production lines in order to seek new breakthroughs, such as IT TCON (timing controller) products. These products are manufactured using a 12-nanometer advanced process to create efficient computing units, integrating UHD 240Hz LCD and OLED panel display compensation functions, targeting high-end laptops.

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(Photo credit: Novatek)