Apple faces greater challenge in antenna supply on next year’s iPhone 12

In a report to investors this week, Ming-Chi Kuo, an analyst at Tianfeng International Securities, said Apple expects to launch the next generation of iPhones by 2020, while increasing reliance on liquid crystal polymer (LCP) and flexible printed circuit (FPC) antenna technology. However, the shortage of suppliers may lead to production challenges for the company. Analysts expect demand to reach 220 million in 2020, up 110 percent from current orders.

Apple faces greater challenge in antenna supply on next year's iPhone 12

iPhone 11 Disassembling (pictured from iFixit, via Apple Insider)

Ming-Chi Kuo points out that about 70 to 75 percent of iPhones will use LCP FPC parts next year, compared with 45 to 50 percent in 2019.

As Apple moves to 5G mmwave technology, it can drive the penetration of new technologies to some extent. By the end of 2020, 5G models or 15-20% of the current iPhone’s total share of new iPhone products.

Compared to a regular 4G model, the 5G model will require three LCP FPC units. In addition to the 5G iPhone, the successor to the iPhone 11 is also expected to use the LCP FPC antenna on the body.

It is reported that the current generation of iPhone 11 models rely on modified polyamide (MPI) FPC technology. According to Ming-Chi Kuo’s calculations, the iPhone 7 model, which does not rely on the LCP FPC, was discontinued in September.

Shipments of iPhone XR models that do not feature the LCP FPC will also be reduced by 2020 as the phone is phased out.

Demand for this will increase further as the iPad and Apple Watch adopt flexible LCP designs more widely next year.

Murata is the only supplier of advanced antenna components on Apple’s iPhone 11 Pro, but the company may not be able to cope with the surge in orders, according to Ming-Chi Kuo.

With that in mind, the biggest procurement challenge for Apple in 2020 is finding a new LPC FPC supplier and being able to secure a stable supply of high-volume orders, like Murata.

Among the new LCP FPC suppliers, Avary/ZDT is Apple’s best choice to reduce its supply chain risk with its leading development technology.

The company already supplies Apple Watch’s LCP FPC parts to Apple, and its production line has been accepted by Apple.

While Apple’s active supplier, Career, is also competitive, Ming-Chi Kuo says the company has been selected to supply the LCP FPC module as an “iPhone SE 2” rather than a larger iPhone model.

Of apple-certified new LCP suppliers, only Avary/ZDT currently produces LCP FPC using both Panasonic and Azotek’s LCP materials.

We believe that such a strategy will help reduce Apple’s procurement risk and costs. LCP offers more advantages than conventional materials, including excellent frequency attenuation, thermal performance and moisture resistance.

Apple’s production of the iPhone X and iPhone 8 models in 2017 was the first to use the LTE antenna module for the LCP base material, which has since expanded to other major product lines.

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