Changes to iPhones in future hurt firms’ shares

Minebea led declines by Japanese suppliers of components for the iPhone after a report said Apple will shift to organic light-emitting diode screens from 2018.

Shares of Minebea, which supplies backlights for liquid crystal displays currently in use, plunged as much as 10 percent in Tokyo trading, the biggest intraday drop since March 2011. Japan Display fell as much as 9.7 percent, while film maker Nitto Denko dropped as much a 4.9 percent.

Apple will have discussions with component manufacturers to secure its supply chain over the next year, the Nikkei newspaper reported, without attribution.

The shift is a negative for the component sector, as LCDs use more parts than OLED displays, including color filters and backlights, according to Mitsubishi UFJ Morgan Stanley Securities Co.

“There are already smartphone suppliers other than Apple that have began using OLED screens in 2015,” Nobuhito Owaki, a Tokyo-based analyst at Mitsubishi UFJ Morgan Stanley, wrote in a report dated Thursday. “We must consider a scenario where the adoption of OLED panels for smartphones rapidly increases in the mid-term.”

LG Display, a supplier to Apple, climbed as much as 2.2 percent in Seoul.

The Korean company, which competes with Japan Display and Sharp, said in August that it plans to invest about 10 trillion won ($8.7 billion) over the next three years in OLED
development.

BLOOMBERG