Ongoing challenges forcing Apple to buy Retina iPad mini screens from Samsung?

iPad mini (flat, finger)

Run for years by the then op-chief Tim Cook, Apple’s supply chain has become the stuff of the legend. Would-be watchers naively believe deciphering Apple’s next move is as easy as keeping tabs on the chatter coming out of Asia’s supply chain. Tim Cook, of course, begs to differ: on one of conference calls, Apple’s boss cautioned investors against drawing conclusion from any one data point as the company’s supply chain is a very complex beast.

So here’s something for investors and fans to chew on: ET News reported Tuesday that Apple is considering tapping Samsung Display to produce low-power Retina screens for the upcoming second-generation iPad mini because AU Optronics (AUO) was unable to deliver. Samsung would presumably make the screens alongside LG Display, Sharp and perhaps Japan Display, according to a previous February 2013 report

Both AUO, Sharp and LG Display currently supply 1,024-by-768 display panels for Apple’s current-generation iPad mini. ET News reports Apple lost patience because AUO couldn’t get rid of the ongoing yield issues.

And because Apple is though to apply oxide semiconductor LCD to the Retina iPad mini as it enables significant power savings, Sharp could come to the rescue because it’s the only display maker to provide low-power panels in volume.

“Last year, AUO started to supply panels to Apple thanks to its price competitiveness,” the report reads. “However, it could not convince Apple, as it failed to meet the supply deadlines or to develop an LCD with high penetration rate.”

The story claims Apple’s relationship with Samsung Display has improved as the latter has ostensibly developed an LCD sample for Apple. “The company may be able to secure more order than Sharp did, if it can stabilize production yields”, according to a person from the LCD industry.

iPad mini (Minimally Minimal 002, white, desk, Magic Mouse)

The iPhone maker has been evaluating Retina screens for the iPad mini 2 for months. Back in February, it was reported that AUO was gearing up to mass-produce 2,048-by-1,536 7.9-inch Retina panels for the iPad mini 2.

Three months later, the hit-and-miss DigiTimes said AUO saw significant order cuts over manufacturing issues, prompting Apple to divert its attention to rival LG Display.

Manufacturing challenges and Retina panel shortages may have pushed back the iPad mini 2 into early-2014. The reliable KGI Securities Ming-Chi Kuo analyst, who yesterday revised his 2013 second-half Apple shipments timetable, says the “highlight of iPad in 2013″ will be the iPad 5, due in early-September.

The analyst isn’t expecting a Retina-enable iPad mini until March or April 2014 because of the high energy and performance requirements related to squeezing four times the pixels in a thin and light form factor.