Apple is now holding larger quantities of iPhone OLED panels within its supply chain, while also placing additional orders for the components, in a move designed to offset their rising cost.
The ongoing surge in memory prices has made components more expensive for suppliers, but it has also produced other effects across the supply chain. In the case of Apple’s iPhone production lines, these pressures have prompted changes in the way operations are managed.
Longer Inventory Holding Periods
Apple increased its display panel inventory holding period during the second quarter, extending it from four weeks to six weeks. This figure refers to the average length of time a component remains in stock before being used in production.
By building up reserves of OLED screens, Apple is able to secure supply and manage costs at a time when pricing conditions for key components remain volatile.
Managing Rising Component Costs
The wider backdrop is a period of increasing prices for RAM and SSD components, which has driven up expenses for manufacturers throughout the industry. Apple’s decision to stock up on OLED panels and order more of them reflects an effort to balance these pressures within its production planning.
The extended holding period marks a notable shift in how Apple’s iPhone production lines handle inventory, moving from a leaner four-week model to a six-week buffer during the second quarter.
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Image: appleinsider.com
