Apple is navigating a prolonged supply channel squeeze. The iPhone 7, which launched at retail outlets five months ago, has taken its time making itself available to customers waiting weeks upon weeks for one. The Apple Watch Series 2 is also proving to be some trouble for the company, too — unexpected demand has kept it a lucrative commodity worth waiting for.

Several SKUs are out of stock at the Apple Store online and part of that shortage could be traced back to TPK Holding, the company making the touch panel for the Apple Watch. Apple switched the touch-sensing technology in the design from glass-on-glass to touch on lens, a harder to produce product when accounting for the curved display on the Apple Watch.

So hard, in fact, that TPK might quit the very unprofitable watch job lot if it can’t bump yields up — the contract lost money for the company last year. It might move onto smartphone touch panels using 3D scanning technologies.

Digitimes reports that Apple may consider moving to glass-on-film touch sensors and commission General Interface Solution or Biel Crystal to produce those for batches shipping in the second half of the year.

Did TPK count its hand a bit too highly or is Apple driving its partners, by will or by desperation, to the point of instability? Inked paper from Cupertino used to mean a healthy year on the balance sheets for many east Asian firms. Not the case anymore.

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