Japanese business daily Nikkei reported on Tuesday that Toshiba is about to build a factory to make small LCD panels, mainly to supply to Apple for use in iPhones.

According to the paper, Toshiba's subsidiary Toshiba Mobile Display Co will build the facility in Ishikawa prefecture and it will produce low-temperature polysilicon LCD panels, which allow for high-resolution images.

Work on the plant will start by early next year, with production due to begin in the second half of 2011, the paper said.

Apple will invest in the factory, the Nikkei said.

Toshiba has not officially commented on the report, although a company's spokesman told Reuters that the report was untrue.