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Apple Cutting LG Orders Due To iPad 2 Display Issues

Apple is reportedly switching new production orders from LG to Samsung for the iPad 2, as it seems LG Display's LCD shipments for the tablet have had quality issues, forcing Apple to turn to Samsung instead.

The news comes from DigiTimes, who reported on Wednesday that the iPad 2's largest panel supplier is being replaced by rivals Samsung and CMI, since LG production has been disrupted due to quality issues.

According to the report, "LGD's 9.7-inch panels for the iPad 2 reportedly failed to pass drop tests, during which their backlight units (BLUs) failed, the sources said, adding the panels' yield rates were unable to meet Apple's requirement."

In July, LG had shipped between 2.5 million and 2.6 million panels, failing to achieve the 4 million units per month goal. On the other hand, Samsung made some progresses, doubling its production up to 2 million iPad 2 panels in the same month.

But there is a complicated relationship between these three giants. Samsung is not only LG's competitor, being Apple's partner and supplier, it is also Apple's rival on the smartphone and tablet market and is involved in a long-running bitter legal battle over patent infringement.

CMI would be a favourable choice for Apple, but its target for 9.7 inch iPad 2 displays is only 1 million per month. Given Apple's past problems in keeping up with the iPad 2 demand, the Cupertino company won't give up LG for good.