Apple's supply chain is now holding more iPhone OLED panels with Apple also ordering more of them, all to offset the growing cost of buying the components.
While the general effect of the ongoing memory price surge has resulted in more expensive components for suppliers, it also has other effects on the supply chain. In the case of Apple's iPhone production lines, there have been changes in the way they work.
According to sources cited by ETNews, Apple increased the display panel inventory holding period in the second quarter, from four weeks to six weeks. This refers to the average amount of time that a component will be kept in stock before it's used in production.
To a manufacturer, extending the period it holds onto components can increase the relative cost of storing it. There's also the benefit of being able to make bigger orders for components, potentially saving money by reducing the per-component cost due to the economies of scale.
A report source explained that the raw material prices to produce components have rapidly risen, alongside intense pricing pressures of other parts. The OLED panel inventory was therefore increased by Apple to stabilize prices.
