by Hartley Charlton
LG is seeking compensation from Apple following the abrupt cancelation of the microLED Apple Watch due to the substantial investments it made in preparation of the project, The Elec reports.
As a result of the device's cancelation, LG Display has apparently been left with substantial sunk costs, including the expense of purchasing 14 U.S. patents related to microLED technology from Taiwan's Ultra Display. The company now faces potential claims from its equipment partners, some of whom had also invested in the project without formal contracts in place. LG also moved equipment from Gumi in Gyeongsangbuk-do to Paju in Gyeonggi-do, secured space for the microLED backplane process, and recruited specialized personnel to form a task force dedicated to the project. Overall, LG reportedly spent hundreds of billions of won to prepare for the microLED Apple Watch.
Apple's decision to cancel the project was reportedly based on concerns about the economic viability of microLED technology for the Apple Watch. Despite its potential advantages—such as brighter displays, improved color accuracy, and better power efficiency compared to existing OLED technology—Apple determined that the production costs associated with microLED were too high to justify its inclusion in the Apple Watch. There were also significant challenges related to the manufacturing process, which would have made it more difficult to produce the displays in the required quantities.
Tags: LG Display, microLED Apple Watch Guide, The Elec
[ 51 comments ]
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Top Rated Comments
jlc1978
11 hours ago at 07:04 am
I suspect there will be some sort of agreement since LG wants Apple as a customer and Apple wants LG to be a viable suppler to keep display costs down due to competition.
Score: 23 Votes (Like | Disagree)
vertsix
10 hours ago at 07:46 am
So, LG invested all of this time and money WITHOUT a signed contract in hand?
Sounds like a poor business decision. Not something Apple should be financially responsible for.
There was an agreement or contract of sorts. This type of investment doesn't just begin without mutual assurance. Additionally, this happens all the time in engineering with R&D.
Source: am an engineer.
Score: 8 Votes (Like | Disagree)
therunningman
10 hours ago at 07:20 am
My guess is that no supplier/manufacturer will ever go into a verbal agreement with Apple in the future. But when plunking down that much capital, LG should have had something signed in advance.
Score: 7 Votes (Like | Disagree)
HobeSoundDarryl
10 hours ago at 07:21 am
Here we go with a bunch of "no contract: tough loss LG" in favor of Apple Inc. LG probably has 500 contracts with Apple for all kinds of other stuff. There was likely some perception of this moving forward driven by Apple and they were just taking care of a good customer by going a bit out on a limb on this one... with full expectation that that customer wouldn't leave them holding the bag.
Hopefully Apple does the right thing by one of their very important vendors in who knows how many ways. Else, vendor learns an expensive lesson here- makes sure other vendors knows that this client is capable of skipping out on an expensive bill- and then ALL of them demand formal agreements in writing forever after... somewhat complicating Apples execution and even more so many efforts towards secrecy.
"We" always take the Apple side in all things/matters/situations and there's always 2 sides to
everystory.
Score: 7 Votes (Like | Disagree)
asdfjkl;
11 hours ago at 07:09 am
some of whom had also invested in the project without formal contracts in place
Well, that sounds like negligence to me. Why would any company go and make enormous investments without some sort of contract in place?
Score: 6 Votes (Like | Disagree)
paulovsouza
10 hours ago at 07:38 am
Everyone talking about LG’s negligence, but Apple being a big company I can see them forcing their hand, and Apple knowing they could back out at any time being a plus for them. LG probably relies on Apple, Samsung makes their own display, there’s no competition.
Score: 6 Votes (Like | Disagree)
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