By JURO OSAWA
Japan's Sharp Corp. hasn't started mass producing screens for Apple Inc.'s next iPhone, a person with knowledge of the situation said Friday, signaling potential supply problems for the U.S. company as it gears up to unveil its next-generation smartphone next month.
People familiar with the situation said that Sharp had planned to start shipping iPhone screens to Apple by the end of August, but mass production has been delayed partly because of manufacturing difficulties. It remains unclear when the company can start shipping the panels, one of the people said.
Sharp is one of the three suppliers of liquid-crystal-display panels for the next iPhone. The other two suppliers are Japan Display Inc.â€"a new company that combined three Japanese electronics makers' display unitsâ€"and South Korea's LG Display Co.
LG Display and Japan Display have started shipping the screens to Apple, according to people familiar with the situation.
It is unclear whether the delay at Sharp could lead to supply problems for the new iPhone. Carolyn Wu, a Beijing-based spokeswoman for Apple, declined to comment.
In July, people familiar with the situation said that the next iPhone will use in-cell LCD panels, a new technology that makes the smartphone's screen thinner by integrating touch sensors into the LCD, eliminating the need for a separate touch-screen layer. But the people said that in-cell panels are technologically more difficult to mass produce compared with conventional LCD panels.
LG Display Chief Executive Han Sang-beom said last week the company began mass producing in-cell LCD panels.
The delay in Sharp's delivery raises questions about whether Apple will be able to secure enough iPhone screens to meet strong demand expected for the new model.
Apple has said it plans to unveil a new product at a Sept. 12 event, which many believe will be the next iPhone.
The stakes are high for the new iPhone. Apple's biggest competitor in the smartphone industry, South Korea's Samsung Electronics Co., unveiled a number of new products Thursday at a trade show in Berlin, Germany. The two companies, which together dominate the global market for smartphones with about 50% of the market, are also locked in a legal battle over patents for their mobile devices. Last week, a U.S. federal court jury awarded Apple $1.05 billion in damages for its patent infringement claims against Samsung.
The delay at Sharp also comes as the Japanese electronics maker, which also makes televisions and solar panels, is struggling to cope with a cash crunch amid approaching debt repayment deadlines. While sitting on more than $15 billion in interest-bearing debt, Sharp has forecast a net loss of 250 billion yen ($3.18 billion) for this fiscal year through March, as its core businesses remain unprofitable.
On Friday, Sharp's shares ended the morning session down 9.3% at ¥206, amid concerns over the planned investment from its Taiwanese partner Hon Hai Precision Industry Co., which agreed in March to take a 9.9% stake in the troubled Japanese company.
â€"Jung-Ah Lee in Seoul contributed to this article.Write to Juro Osawa at juro.osawa@dowjones.com
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