Foxconn’s Scrapped LCD Factory Deal Could Hit Apple

Apple’s supply chain may be facing a new wrinkle in Japan.

According to Nikkei Asia, Foxconn has withdrawn from its planned acquisition of Sharp’s second LCD factory in Kameyama, citing weak LCD prices. As a result, Sharp will halt production at the facility in August and seek voluntary retirement from 1,170 employees, booking roughly 10 billion yen ($88.8 million CAD) in restructuring costs this fiscal year (via MacRumors).

The Kameyama “K2” plant primarily manufactures small- and mid-sized LCD panels used in smartphones and tablets. While Foxconn — Sharp’s majority owner and Apple’s primary iPhone assembly partner — had initially planned to continue panel production and add AI server lines, those plans have now collapsed.

That could have short-term implications for Apple.

According to Taiwanese research firm TrendForce, if production at the K2 factory ceases, short-term supply of oxide LCD panels for certain MacBook and iPad models “could face disruption.” The plant’s oxide backplane technology has long been considered a benchmark for Apple’s MacBook and iPad displays. However, increased competition from Korean and Chinese panel makers has eroded Sharp’s technological edge.

That said, any impact on Apple shipments may be limited. TrendForce estimates that Apple accounts for just 16-17% of the factory’s overall utilization, and the company still has roughly six months to adjust. Given Apple’s well-known supply chain flexibility, it’s unlikely we’ll see major delays.

It’s also worth noting that Apple is steadily moving away from LCD technology. The company has already transitioned its higher-end iPad Pro models and the entire iPhone lineup to OLED displays. An OLED iPad mini is rumoured to be on the way, and Apple is expected to debut its first OLED MacBook — potentially even a touchscreen model — this year. As more of Apple’s lineup shifts to OLED, reliance on legacy LCD suppliers like Sharp will naturally decline.

For now, this appears to be a manageable disruption rather than a full-blown crisis. Still, it’s a reminder of how quickly global component dynamics can shift — especially as the industry pivots toward AI infrastructure and next-generation display technologies.