Fitch Ratings expects Apple to introduce a new iPhone with organic light-emitting diode (OLED) technology. "Apple could use OLED panels in its phones, which may further boost demand for the panels, although additional capital spending would be needed to meet incremental demand," Shelley Jang, director at Fitch, said in a report to clients, Wednesday.

"The cost of small OLED panels is decreasing at a faster-than-expected rate due to yield improvements, and is now similar to the cost of LCDs."

"We expect the OLED market share gain against LCD panels to accelerate in the short term, especially in the smartphone sector," she added.

Currently only Samsung Electronics uses mostly OLED displays in its Galaxy smartphones.

But Fitch expects that the transition to OLED technology in the TV sector to be likely slower than in the mobile sector as costs remain high relative to LCD.

Apple has been widely rumored to swift from LCDs to OLEDs for its future iPhones. This would benefit both LG and Samsung Display, at least in the beginning.

Chinese, Taiwanese and Japanese competitors will have to endure several years of startup losses and substantial capital investment to catch up.