Apple opens secret lab to develop display technologies

Company looking to reduce reliance on supplies from the likes of Samsung and LG

Apple opened a production laboratory in northern Taiwan where engineers are developing new display technologies, according to people with knowledge of the facility.

The Apple building in Longtan has at least 50 engineers and other workers creating new screens for devices including iPhones and iPads, the people said, asking not to be identified because the details aren’t public.

Apple has recruited from local display maker AU Optronics  and Qualcomm, which used to own the building, the people said. Kristin Huguet, a spokeswoman for Apple in Cupertino, California, declined to comment.

Apple began operating the lab this year as it aims to make products thinner, lighter, brighter and more energy-efficient. Engineers are developing more-advanced versions of the liquid- crystal displays currently used in iPhones, iPads and Mac personal computers, the people said.


Apple also is keen to move to organic light-emitting diodes, which are even thinner and don't require a backlight, they said. Samsung, Sharp Making its iPhones and iPads slimmer and longer-lasting with each generation has been a hallmark of Apple, helping drive $178 billion in annual sales from the two product categories.

By working directly on the development of display technologies, Apple can reduce reliance on the technology developed by suppliers such as Samsung Electronics, LG, Sharp and Japan Display. Instead, the company can develop the production processes in-house and outsource to smaller manufacturers such as Taiwan's AU Optronics or Innolux.

Shares of AU Optronics surged 7 per cent, the most in four months, in Taipei and Innolux jumped 2.6 per cent. Japan Display dropped 3.9 per cent in Tokyo to the lowest in more than two months, and Sharp fell 1.6 per cent.

Job Postings

Apple does the bulk of its research at its headquarters in Cupertino and outsources the manufacturing of almost all devices and components to suppliers such as Foxconn Technology Group and Japan Display. The iPhone maker also employs scientists and engineers globally to develop materials and manufacturing technologies.

Apple continues looking for engineers to work at its display panel facilities, according to job postings on LinkedIn. Tucked in a corner of Longtan Science Park, between a forest and the building site for a new biotechnology factory, the structure shows no outward indications of belonging to the world's most valuable company. Fifty kilometres from downtown Taipei and within an hour's drive of the Foxconn headquarters, the white-tiled factory displays no corporate signage, a stark contrast to neighboring plants emblazoned with 3-foot-tall logos for Leotek Electronics, Taiwan Semiconductor Manufacturing and AU Optronics.

A short driveway, a half-dozen steps and sliding glass doors lead to a counter and a receptionist in front of an Apple logo on the wall. That sign, and an iMac displaying Apple’s standard visitor registration screen, are the only visible indicators Apple resides here. The receptionist wouldn’t provide the name or contact details for someone who could talk about the facility. Guards at an outside security post also declined to give contact details for anyone responsible.

Records from the Hsinchu Science Park management office, which manages the Longtan facility, show Apple moved into the factory in April and that Qualcomm Panel Manufacturing had occupied the site from 2008. Records from the economics ministry show Apple last amended its Taiwan registration in October. The form now shows the Longtan address, changed from an earlier listing in downtown Taipei, as the headquarters of Taiwan Apple .

The site was where Qualcomm tried to develop its own displays called Mirasol. Samsung, which makes both components and consumer devices, is among the few suppliers currently offering smartphones with OLED displays, which typically are more expensive to produce than LCDs.

On Monday, a small group of workers with Apple ID badges around their necks stepped off the property for a smoking break amid the hum of industrial filters. They declined to comment on the building’s purpose and what they’re working on.