These are key iPhone 8 production issues plaguing Apple and its suppliers

Corroborating yesterday’s report by KGI Securities analyst Ming-Chi Kuo, Asian outlet Nikkei said Tuesday that customers may in fact be unable to get their hands on Apple’s upcoming iPhone 8 until late October or November at the earliest.

According to industry sources, volume production of so-called Tenth Anniversary iPhone has hit a snag as suppliers struggle to perfect key components including curved OLED panels, wireless charging components and miniaturized printed circuit boards, among other parts.

Apple and its suppliers are still working to resolve the production issues contributing to the delay. For example, suppliers are struggling with overheating issues in wireless charging modules and the new wireless charging board still isn’t working properly.

Moreover, Apple’s exclusive OLED panel supplier, Samsung Display, is facing challenges “in delivering what Apple wants,” with one analyst mentioning a possible one-to-two-month delay in mass-production of OLED panels for the device.

“Samsung originally planned to begin churning out OLED panels in May but now the schedule will likely be pushed back to the end of June or sometime in July,” said Brian Huh, an analyst at research company IHS Markit. Prior reports shed light on how Samsung and its Korean suppliers could dominate the iPhone 8 supply chain for some time.

Samsung’s display-making arm, which produces more than 90 percent of all OLED panels for smartphones and tablets, will convert its TFT-LCD manufacturing facility to a 6G flexible OLED plant to meet Apple’s needs but that factory is not expected to kick off volume production of OLED panels for iPhone 8 before the fourth quarter of 2017.

Apple has also designed a much smaller, stacked printed circuit board for iPhone 8 to allow a more powerful two-cell battery for the device and make room for other components like 3D-enabled cameras, additional sensors for a True Tone-capable display and other goodies.

On that front, there are still some quality issue to overcome to achieve smooth mass production of the new logic board, said Sean Kao, an analyst at IDC.  For the uninitiated, a yield rate measures the quantity of usable or saleable units coming out of a batch of components at the end of a manufacturing process.

Lastly, iPhone 8 is expected to adopt advanced 3D NAND flash memory chips that may be in short supply as well. Summing up, Apple’s suppliers are still afflicted by low yield rates and won’t be able to ramp up production until they overcome any production challenges.

The prolonged yield problems could force Apple to pre-announce iPhone 8 in September even though the handset may not become widely available until late October or November.

For what it’s worth, Nikkei states that the iterative LCD-based 4.7-inch iPhone 7s and 5.5-inch iPhone 7s Plus updates will include other improvements such as a glass body. Those devices should be available shortly following Apple’s expected announcement in September.

All things considered, Apple is planning a massive new iPhone launch come this fall, hardly a surprise given the pent-up demand for an overhauled iPhone, the tenth anniversary of the iconic handset and a massive pool of iPhone 6 owners who are now ready to upgrade.

“The placement of orders is much more aggressive than the previous two years but not as high the year when they rolled out iPhone 6 in 2014,” said a semiconductor industry executive whose company has already begun to ship small quantities of memory chips for iPhone 8.

Yesterday, KGI Securities told clients that production ramp-up of the OLED-based iPhone models could be delayed to as late as October-November compared to the usual August-September timeframe, due to “increased production difficulty.”

iPhone 8 concept by Benjamin Geskin for iDropNews

Source: Nikkei