Concerns are rising that the strike at LG Display's factory in China may deal a blow to its supply of LCD panels to Apple if the labor dispute is prolonged, industry sources said on Wednesday.
About 8,000 Chinese workers at the company's Nanjing plant have been staging a strike, demanding fair incomes compared to their Korean colleagues, as well as year-end incentives.
The strikers attempted to engage in negotiations with the management in a bid to settle the labor dispute, but the two groups reportedly failed to do so.
LG Display, the world's second-largest flat panel maker, was selected as one of the display panel suppliers for the iPad 3, along with Samsung Electronics and Japan's Sharp.
With some reports claiming that the three companies have already shipped about 3 million units of high-resolution flat panels to Apple's manufacturing chain by November, the shipping of display panels were scheduled to continue as the newest version of Apple's popular tablet PC is expected to launch between March and April.
"Although LG's factory in Nanjing may not be the biggest in scale, the problem seems to be getting serious internally," said an industry source who wished to remain anonymous. "With the factory employees there working on making display panels for Apple, we believe the strike will have a negative impact on the production process as a whole since the factory is not only responsible for manufacturing but also performs functions like research and development as well as after-services."
However, an LG Display official in Seoul said the strike will not have an impact on the production of LCD displays considering that the Nanjing factory focuses on the production of display panels for TVs and computer monitors.
He also said assembly lines in other factories could be used for module manufacturing, while confirming the strike has been ongoing for three days.
November and December are normally times when LCD manufacturers cut down on production, but the strike will inevitably deal a blow to LG Display which has been suffering from slowing industry demand and low display panel prices.
Founded in July 2002, LG Display Nanjing Co., located in Nanjing Economic and Technological Development Zone, was the first overseas module factory for the firm. The factory is responsible for researching, designing, manufacturing and selling LCD products as well as giving after-service. It is considered to be among the biggest module factory in the global LCD industry.