[News] Apple’s Abandonment of Micro LED Watch Project Reportedly Results in Further Impact

Following Apple’s cancellation of the Micro LED watch project, the associated supply chain has been further impacted. According to a report from TechNews citing MicroLED-Info, the latest one is KLA Corporation, which has announced a complete exit from the flat panel display (FPD) equipment business.

KLA recently announced its complete withdrawal from the FPD market. The company, which acquired Israeli automated optical inspection (AOI) system supplier Orbotech for USD 3.4 billion, had entered the Micro LED market opportunistically through this acquisition, as Orbotech is a developer of inspection equipment for the semiconductor and display industries.

Due to slowdowns in investment and demand in the consumer electronics market, Orbotech’s performance has been lackluster in recent quarters, with the entire division accounting for only about 3% of KLA’s revenue, totaling USD 283 million in 2023, a decline of 48%. As per the same report, it’s believed that KLA’s decision to shut down this division is linked to the cancellation of a major project with a key customer, likely Apple.

As FPD is one of Orbotech’s main divisions, with KLA announcing its withdrawal from the FPD market, more than 100 employees from this division will face layoffs. KLA stated that exiting the FPD equipment business will not impact the company’s revenue expectations for this quarter, which are projected to be USD 2.3 billion with a variance of plus or minus USD 12.5 million.

Apple’s decision in March to cancel the Micro LED watch project sent shockwaves through the display industry and Micro LED developers.

German LED giant Osram is still considering its next steps, with expected losses of USD 650-900 million; electronic assembly solutions provider Kulicke & Soffa also announced losses of USD 110-130 million due to the cancellation of its collaboration with Apple. Additionally, LG Display’s Micro LED development team within the Strategic Customer (SC) department has started downsizing.

Read more

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(Photo credit: Apple)