New iPhone boosting electronics parts prices in July-Sept
Samsung wins big as primary OLED panel supplier
HIDEAKI RYUGEN and SHUHEI OCHIAI, Nikkei staff writers

TOKYO — Prices of major electronics parts and materials are likely to rise in the three months through September, thanks to the upcoming latest edition of Apple’s iPhone, which is expected to hit the market this fall.

Demand is expected to rise for organic light-emitting diode panels, which Apple is adopting for the first time in iPhones. Memory chips are also expected to fetch higher prices amid continued supply shortages. In contrast, small and midsize liquid crystal display panels will likely fall in price as fewer of them will be used in future iPhones.

TOKYO — Prices of major electronics parts and materials are likely to rise in the three months through September, thanks to the upcoming latest edition of Apple’s iPhone, which is expected to hit the market this fall.

Demand is expected to rise for organic light-emitting diode panels, which Apple is adopting for the first time in iPhones. Memory chips are also expected to fetch higher prices amid continued supply shortages. In contrast, small and midsize liquid crystal display panels will likely fall in price as fewer of them will be used in future iPhones.

Companies like Amazon.com are already trying to secure supplies of memory chips for 2018, a sales representative of a major memory chipmaker said.

Production of smartphones and domestic appliances usually increases during the July-September period ahead of the year-end shopping season. And demand for memory chips rises accordingly. Normally, suppliers respond to the temporary surge in demand by releasing inventories from the April-June quarter. But this year, Amazon and other companies providing large-scale cloud services in North America are making earlier moves to secure memory chips, fueling fears of supply shortages in the market.

Much of the rise in demand for electronics parts for smartphones comes from Apple. The latest version of the iPhone, which is now in its 10th iteration, is set to launch this fall. Production of the new model begins from July to September in stages. Yasuo Nakane, a senior analyst at Mizuho Securities, said, “The top-end model [of the new iPhone] will be over $1,000, which will be a big challenge for Apple.”

NAND chips up 13%

Memory chips will likely become more expensive. Apple is expected to double the minimum data storage capacity on its new iPhone, which will use NAND flash memory chips as a storage device. Apple will have to vie for DRAM chips, which are used to store information temporarily, with Nintendo, whichses the chip in its new Switch game console. Shortages of DRAM chips are also affecting computer makers. An official of an overseas device maker said that only 70-80% of orders have been delivered.

The benchmark price for a large lot of NAND chips has risen by 13% in July from the previous month, while that for DRAM chips rose by 3%. Chipmakers give priority to supplying chips to makers of smartphones and servers as those companies tend to place big orders. As a result, chips for PCs and SD memory cards are in increasingly short supply. As chipmakers produce more NAND chips to cover shortages, NOR flash memory chips are expected to be in short supply and stay expensive.

The compound eye-like cameras used in current iPhone models are being adopted by other smartphone makers. Prices for its basic component — complementary metal oxide semiconductor image sensors — is thus expected to stay high. “The number of cameras to be fitted [on a smartphone] will increase and so will the need for high performances,” said Kenichiro Yoshida, executive deputy president of Sony.