According to a report from Taiwan’s Commercial Times, the iPhone 15 series is slated to make its debut in mid-September. The closure of Foxconn’s Zhengzhou factory at the end of 2022, which caused disruptions in the shipment of iPhone 14, prompted Apple to not only divert orders to Pegatron but also actively support the Chinese factory Luxshare to become the second-largest assembly plant. It is projected that Luxshare will account for 28% of the iPhone 15 shipments.

With Apple’s backing, Luxshare has swiftly emerged as a potential rival to Foxconn in the assembly sector. Issues such as supply instability and employee departures arising from the closed management of Foxconn’s Zhengzhou facility led Apple to promptly shift 4 million iPhone 14 orders to Pegatron and shift their focus onto Luxshare. This expansion extended beyond mainland China, reaching into India as well.

The Commercial Times report mentioned that for the iPhone 15 series, Foxconn is expected to retain its position as the largest assembly factory. Analysts estimate that Foxconn will be responsible for around 58% of the production output. However, Luxshare is set to take on the assembly of the two lower-tier models, as well as a segment of assembly for the highest-tier model. This accomplishment propels Luxshare to become the second-largest assembly factory for the iPhone 15, holding a share of 28%. Additionally, Pegatron is expected to hold a share of approximately 13%, positioning itself as the third-largest assembly factory.

According to research conducted by TrendForce, Luxshare’s manufacturing proportion for the iPhone 15 and iPhone 15 Plus this year is expected to reach 29% and 65%, respectively. Furthermore, Luxshare has secured a considerable 35% of the manufacturing proportion for the highest-tier iPhone 15 Pro Max.

The report from the Commercial Times also highlights that Luxshare has rapidly evolved into a pivotal player in Apple’s supply chain. In addition to handling the assembly of the iPhone 15, Luxshare has taken on the entire assembly of Apple’s heavyweight new product, the Vision Pro, this year. Moreover, Luxshare has secured a remarkable 40% of the shipment volume for the Apple Watch, establishing itself as the world’s leading outsourced manufacturer of smartwatches.

Apple is expected to unveil the iPhone 15 in September 2023, with minimal changes anticipated in its PCB design. According to research from TrendForce, the iPhone 16, set to launch in 2024, is projected to adopt the use of RCC (Resin Coated Copper) material for its mainboard to reduce the device’s thickness.

TrendForce’s analysis is as follows:

The iPhone 15 Pro Max will feature RFPCB for its periscope lens, while the iPhone 16 Pro series will utilize RCC for its mainboard.

Looking first at the primary changes in the iPhone 15’s PCB, constrained by factors such as device dimensions and product pricing, only the iPhone 15 Pro Max will incorporate a periscope lens. In contrast to the conventional FPC (Flexible Printed Circuit) used in typical lenses, the iPhone 15’s periscope lens will adopt RFPCB (Rigid-Flex Printed Circuit Board) to better utilize space and control the device’s thickness.

Currently, iPhones employ SLP (Substrate-Like PCB) for their mainboards. To achieve a thinner device profile, Apple is planning to introduce RCC as the mainboard material for the iPhone 16 Pro series, scheduled for the latter half of 2024. This will involve using 2 to 8 layers of RCC within the 18 to 20 layers of SLP.

However, based on supply chain information, RCC has not yet passed drop tests, leading to potential fractures between SLP layers. If this issue persists beyond the end of 2023, the adoption of RCC might be postponed until the introduction of the iPhone 17, which could be expected in 2025.

The SLP architecture is moving closer to ABF substrates, while RCC can only replace a portion of the CCL layers.

Taking a closer look at RCC’s material characteristics, RCC involves applying semi-cured epoxy resin onto copper foil after heating. The main distinction between RCC and standard CCL (Copper Clad Laminate) lies in the absence of glass fiber cloth in RCC. RCC primarily consists of resin and copper foil, and it employs ABF (Ajinomoto Build-up Film) instead of PP (Prepreg) as the insulating material between copper foil layers. RCC is also a material used in ABF substrates, indicating that SLP architecture is moving closer to ABF substrates.

Due to its lack of glass fiber cloth, RCC offers advantages such as reduced thickness and suitability for fine line designs. Its lower Dk (Dielectric constant) and Df (Dissipation Factor) characteristics contribute to high-frequency and high-speed transmission. However, due to its softer nature, RCC has poorer support capabilities, allowing it to only replace certain CCL layers.

It is expected that Ajinomoto will have a monopoly in the iPhone RCC market in 2024, with Taiwanese manufacturers potentially becoming suppliers in 2025.

In the supply chain realm, since ABF substrates also involve RCC, Ajinomoto, a primary ABF supplier, is projected to become the exclusive supplier of iPhone RCC materials in 2024. ITEQ, an early adopter of RCC materials, successfully developed RCC production lines by the end of 2021, making it the first Taiwanese CCL manufacturer to do so. As such, it stands a chance of becoming the second supplier.

EMC is a major supplier of iPhone mainboard CCL materials, with an estimated market share of around 95% in 2023. TSEC also successfully developed RCC materials in 2022, indicating that both ITEQ and EMC have potential to enter the iPhone RCC supply chain in 2025. Other companies, including Japanese firms Mitsubishi Gas Chemical, Panasonic, and Korean company Doosan Electronics, have also developed RCC materials, indicating an interest in becoming part of the iPhone RCC supply chain.

According to a report by Taiwan’s Commercial Times, China’s Haitong Securities has taken the lead in reducing shipment expectations before Apple’s upcoming new product launch next month. The company has lowered the shipment forecast from the initial 83 million units to 77 million units, marking a decrease of 6 million units.

Industry experts point out that lackluster demand in the end market and challenges in the manufacturing process are the main reasons behind the market’s growing skepticism towards iPhone 15 shipment numbers.

Haitong Securities indicates that Apple’s iPhone 15 shipment volume could be revised down to 77 million units. This is primarily due to lower-than-expected yield rates for the CMOS image sensors (CIS) provided by Sony for the periscope lenses. The production bottleneck for iPhone 15 and Plus models is Sony’s 3-layer CIS structure (PD/TX + pixel + ISP), leading to subpar production yields.

Industry experts also mention that the high difficulty in producing the titanium metal frame is attributed to the differing coefficients of thermal expansion between titanium and aluminum. However, this issue can be managed by increasing Foxconn’s production capacity.

The LIPO (Low Injection Pressure Overmolding) screen, on the other hand, faces low yield rates from LG and will need Samsung’s support. Nonetheless, the supply situation for these two components should reach a controlled stage.

Industry sources believe that delays in production for iPhone 15 stem from Sony’s lens sensors, the new titanium alloy frame, and the 1.55mm narrow border screen. However, the primary reason for Apple’s adjustment of iPhone 15’s sales target remains concerns over demand. Both the iPhone 15 Pro and iPhone 15 Pro Max are expected to come with higher price tags, potentially dampening consumer willingness to purchase. The decision to trim production plans prior to the new phone’s release warrants close attention to whether it garners consumer acceptance after hitting the market.

Based on a recent analysis by TrendForce, LG Display is encountering a challenge with its supply of 6.7-inch panels and chassis for the iPhone 15 Pro Max. The issue revolves around tolerance, leading to the development of a growing dark spot (GDS) once the components are assembled. Unfortunately, this problem has hindered the successful passage of quality verification tests. Consequently, LGD’s production timeline is anticipated to face a one-month delay, awaiting the resumption of shipments following the completion of revalidation later this month. To manage the reduced panel supply during this interim period, Samsung Display (SDC) will step in and provide supplementary support.

From the standpoint of downstream assembly facilities, the adjustments in supply have the potential to impact production operations in Zhengzhou for approximately two weeks. It’s projected that by ramping up production subsequently, these effects can be mitigated.

On a different note, BOE has successfully achieved its goal for this year by participating in the development of panels for both the iPhone 15 and 15 Plus. However, owing to recent quality concerns necessitating mask adjustments, they might encounter a significant decrease in shipments. Simultaneously, since SDC is a key supplier for these two new models as well, they will step up to fill the void created by BOE’s supply shortfall.

Taking a historical perspective on BOE’s involvement in supplying iPhone panels, their journey began with the iPhone 12, providing components for repairs, and subsequently transitioning into regular supply for the iPhone 13. Their prowess in LTPS and OLED technology has been acknowledged. However, with the introduction of the iPhone 15 and 15 Plus models, which incorporate the Dynamic Island design featuring a center-hole punch, the demands placed on the panels have become more stringent. The alteration in mask design is likely a pivotal factor that requires additional time for BOE to optimize panel yield and quality.

TrendForce underscores that the issue pertaining to panel quality only marginally affects the overarching shipping schedule for the iPhone 15 series. Its main consequence lies in the reshuffling of panel suppliers, while SDC continues to assert its dominance as the primary supplier of new model iPhone panels this year, accounting for nearly 70% of the market share.