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.

An increase in orders

At the same time as increasing how long inventory is held for, Apple has also increased the size of its orders to match.

The second quarter is Apple's off-season for production, and usually has lower stockpiles of components until a rise before the September launch. This year, it's a bit different.

Display panel orders have apparently been higher than normal in Q2, in part because of the continued demand for the iPhone 17 series. Apple's global smartphone shipments increased 13% year-over-year.

The increase in orders is viewed as an attempt by Apple to minimize any rise in component cost by simply buying more of them in the first place. The larger the order, the lower the per-item cost to Apple.

Increasing orders and storing them for longer is a compromise, but one that minimizes how much of that extra cost gets handed down to consumers.

A continuing trend

While the report is about Apple's display issues, it's not the only part of its iPhone empire that has to deal with production issues.

Memory is a big and unavoidable problem. Manufacturing capacity in 2027 for the major vendors is already allocated ahead of time, as customers fight to secure a supply for their products.

The cost of memory has even led to supply chain rumors claiming TSMC has a billion-dollar stockpile of Apple chips it can't complete, due to not having enough memory to complete packaging.

While that particular rumor is probably fake, it does show that the memory crisis goes far beyond increasing the price of one important component.