Sharp has drastically cut-back production of 9.7-inch touchscreens for Apple's iPad, shifting its focus to the 7.85-inch screens that it makes for the iPad Mini at its Kameyama plant in Japan.
The news caps a slowdown that began in 2012 as Apple looks to better manage its inventory of products to avoid over-production and, especially, discounted sales that would undermine the high selling prices that it commands.
News of the slowdown was reported by newswire Reuters, although neither Apple nor Sharp would verify the reports. It is unclear whether the production shift is due to changes in the pattern of demand or consumers opting for a cheaper model.
However, Macquarie Research, part of the Australian banking group Macquarie, has forecast a 40 per cent fall in iPad shipments from 13 million in the fourth quarter of 2012 to some eight million in the current quarter.
The news follows on from reports that Apple had slashed orders for screens for its new iPhone 5 smartphone - and for other components in the supply chain - amid disappointing sales. Its flagship iMac computer is also behind schedule as the company's suppliers and outsourced manufacturers struggle to produce the new products.
Other major suppliers to Apple include Samsung and LG, who both declined to comment on the record. However, sources at LG Display apparently told Reuters that iPad screen production had fallen in the current quarter, but attributed it to seasonal factors.
Investment banks that follow Apple, though, have suggested that the new iPad Mini has partly cannibalised sales of more expensive Apple iPad products.
A fall in demand for smartphone and tablet screens could have a significant knock-on effect on Sharp, which has struggled financially in the past year.