According to Taiwan’s Central News Agency; Apple is planning to use new “in-cell” display technology from industry leading Japanese manufacturers in the next-generation iPhone 5.

This change would benefit Japanese suppliers Sony, Sharp, and Toshiba, who lead the industry in “in-cell” technology.

Compared with on-cell technology, touch panels that use in-cell technology can be made thinner because the touch sensors are actually placed inside the color filters rather than on top of them, he explained.

At present, Taiwan’s TPK Holding Co. and Wintek Corp., which supply touch panels to Apple, use mainly on-cell technology in their products, according to the two companies.

Digitimes is also reporting similar claims, citing Apple’s supply chain. The report also notes that Sharp and Toshiba will both be increasing their production of in-cell panels this quarter to prepare for the demand.

[via macrumors, digitimes]