LG and Samsung are to spend over $10bn to create new OLED manufacturing plants to supple screens for Apple's iPhones in 2018, it has been claimed.
The Electronic Times report, citing unnamed sources,comes after years of speculation that Apple will start using the next-generation technology in its phones.
OLED screens are thinner and offer better picture quality than the mainstay liquid crystal display screens.
Japan's Nikkei newspaper reported last month that Apple plans to start using OLED screens for iPhones starting in 2018.
LG and Samsung Display are close to a final agreement with Apple for the screens, the Electronic Times report said, adding the two Korean firms plan a combined 15 trillion won ($12.8 billion) in capital expenditure to build up OLED production capacity over the next two to three years.
Apple will likely provide some funding to both firms to help with the investments, the paper added.
LG Display and Samsung Display declined to comment, while Apple could not be immediately reached for comment.
Samsung Display, which currently supplies OLED smartphone panels to parent Samsung Electronics and Chinese vendors, is likely getting bigger volumes from Apple than LG Display, the paper said.
Earlier this month it was revealed Apple has opened a production laboratory in northern Taiwan to develop new 'superthin' phone and watch displays.
According to Bloomberg, the facility is Longtan has at least 50 engineers.
Apple has recruited from local display maker AU Optronics Corp. and Qualcomm Inc., which used to own the building, the people said.
WHAT DOES OLED STAND FOR?
OLED stands for organic light-emitting diode.
Its panels are made from organic materials that emit light when electricity is applied to them.
As a result, OLED panels don't use a backlight meaning they are thinner than LCD displays.
OLEDs additionally have bright colours, brilliant contrasts and a wide-viewing angle.
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