According to reports from China, several mobile phone makers, including Huawei, Oppo and Vivo (BKK) are worried about the tight AMOLED supply, especially as Apple's appetite for AMOLED displays may end up taking up all existing and future capacity in the near future.

The reports suggest that the three phone makers are discussing the forming of a new alliance that will secure AMOLED supply. The alliance will make investment into flexible OLED production by Chinese display makers, and secure capacity - in a similar fashion to what Apple is doing with Samsung and has done before with LCD makers.

The reports further say that flexible OLED and VR developer Royole (who recently raised $80 million) will also join the alliance, and will construct a fleixlbe OLED fab in Shenzhen, China. Royole's fab will be a 5.5-Gen flexible and rigid AMOLED one, with a monthly capacity of 45,000 substrates.

BKK Communication (owners of the Vivo brand) will also begin AMOLED display production via a new subsidiary called MGV. MGV will start investments towards the new fab in 2017.

This is a very interesting report. I think that an alliance to secure AMOLED capacity makes sense, but if the report is true this is a very long-term view by these phone makers. New AMOLED fabs that will begin investments in 2017 will probably not be able to produce high-quality and high-volume AMOLEDs by at least 2020. I think it would make much more sense for these phone makers to approach existing OLED makers (SDC or LGD in Korea, or BOE, Truly or Visionox in China) and co-invest in new production lines.

In any case this will be an interesting development to watch...

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