Apple CEO Tim Cook speaks during Apple's "It's Glowtime" event in Cupertino, Calif., Sept. 9, 2024. AFP-Yonhap

Rumors that Apple may launch a foldable device in late 2026 are fueling expectations of potential benefits for Korean companies in the U.S. tech giant's supply chain.

According to industry sources on Tuesday, Apple is now in talks with vendors to secure key components for the upcoming foldable device, planning to select partner companies for the new hardware design, by the second half of this year. While it remains uncertain whether it will be a smartphone or a tablet computer, the sources said a smartphone is more likely.

With the global smartphone market slowing down amid the lack of compelling innovations, the new foldable device is becoming a silver lining for Korean parts companies, as Apple's entry into the foldable market is expected to accelerate the sluggish segment and expand the sector, which has been largely confined to Korea and China.

Against this backdrop, Samsung Display is enjoying a positive outlook, as it is expected to be the main supplier of foldable displays for Apple's new device, based on its successful track record for Samsung Electronics' Galaxy Z Fold and Z Flip series.

A model demonstrates Samsung Display's foldable display for a tablet device in this handout photo released, Jan. 5. Courtesy of Samsung Display

Samsung Display has reportedly been exclusively developing foldable displays for Apple devices since last year, as the company's technological capabilities in the sector are already proven in the market.

"There are three major OLED panel makers currently capable of producing foldable screens — Samsung Display, LG Display and BOE — and Samsung is the only display firm which has the experience of commercially producing foldable displays for smartphones at a global level," an industry official said.

LG Display has been actively developing foldable OLED displays, but its focus remains on laptops. In 2020, it commercialized the industry's first foldable OLED screen for Lenovo's laptop and later added HP and LG Electronics to its roster of clients. However, the company has yet to supply foldable panels for smartphones or tablet PCs.

China's BOE is known for supplying displays for Huawei's foldable smartphones and is assumed to be supplying screens for Huawei's latest Mate tri-fold smartphone, the Mate XT. The company has a track record of supplying flexible displays for Samsung smartphones as well. However, smartphones using BOE's foldable panels are mostly targeting China's domestic market, with industry officials saying the global market has reservations about the quality of BOE's foldable panels.

"When Apple develops a new smartphone, it prioritizes whether suppliers can mass-produce components according to its schedule — typically by September — and whether they can quickly improve yield rates meeting its standards," another industry official said.

"Given this approach, Apple is unlikely to take a risky bet on a new supplier and is more likely to collaborate with globally proven companies it has previously worked with."

LG Innotek's high-magnification camera module / Courtesy of LG Innotek

Market observers are also optimistic about LG Innotek, which has been providing camera modules for Apple devices.

A new hardware design will inevitably require changes in the physical design of camera modules, prioritizing a slimmer profile rather than enhancements in pixel count or optical specifications. Industry insiders point to Samsung's Galaxy Z Fold and Flip series as examples, where the focus has been on reducing module size.

LG Innotek has already demonstrated its close partnership with Apple in developing slimmer camera modules by supplying folded-zoom camera modules for the iPhone 15 and 16 series. The folded-zoom module, which functions similarly to a periscope, enables a longer focal length while maintaining a compact form. According to tech media outlet the Elec, LG Innotek supplied folded-zoom modules for the initial batch of the iPhone 16 series, which accounted for approximately 70 percent of iPhone 16 units produced in 2024.

Given this track record, industry insiders believe there is a strong likelihood that LG Innotek will be responsible for supplying camera modules for Apple's foldable phone, at least for the initial batch.

"Apple has been fostering cost competition between LG Innotek and Chinese camera module manufacturers, but this typically happens once a model reaches a more developed stage," a third industry official said. "For a new product or form factor, Apple is highly likely to rely on LG Innotek, given the company's manufacturing capacity."

Companies such as Jahwa Electronics, which produces mobile camera actuators, and BH, which produces printed circuit boards, are also gaining attention for possible gains from Apple's rumored foldable devices.