The original Apple iPhone recently celebrated its fifth birthday and little did we know at the time how the device would kick start the smartphone market. We are now building up to the launch of the next version of the device and now iPhone 5 release delay rumours emerge.

There has been a number of reports recently that the new iPhone will feature a slightly larger display, and will use new screen technology that will help the company provide a thinner device, but as iDownloadBlog are reporting this technology is leading to yield problems for suppliers.

It is being claimed that suppliers are finding it hard to generate profits making the in-cell tech for the next iPhone, and comes after Apple were alleged to have offered an estimated $10 to 15 per panel subsidy.

This is being tipped to cause some disruption to Apple’s shipping schedule for the iPhone 5, and Japan Display’s current yield rate is set at 50%, which is being claimed to be insufficient to make enough profit and ramp up production. The yield rates for Sharp have reportedly not improved by much, and have prompted Apple to request that Sharp goes through the validation process again.

These poor yield rates are being blamed on the combined shipments of the iPhone 5 to be around five million units in July, which is way below Apple’s target of up to 25 million for all of the third quarter according to the rumours.

The rumours come under the spotlight when you consider that Apple has pretty much announced the date for the iPhone 5 event via its unofficial sources, such as Bloomberg and The Wall Street Journal among others. You wouldn’t have thought the company would be getting ready to release the handset if they were having supply issues.

Meanwhile according to a report on Want ChinaTimes the iPhone 5 debut is going to be delayed by Apple due to a shortage of the chips being used that are manufactured using the 28-nanometer fabrication. The advanced manufacturing process is known by only a select few companies, and Qualcomm won’t be able to improve the situation until the end of the year according to the rumours.

The demand for 28nm chipsets has been growing steadily with the popularity of smartphones, and only really became an issue during the second quarter. In an attempt to alleviate the problem Qualcomm has entered partnerships with companies such as Samsung and United Microelectronics.

Apple’s high demand for components often results in suppliers running at full capacity, and if these demands are not met they run the risk of losing Apple as a buyer of its components. Apple’s supply chain consists of 156 companies but if one fails to meet its targets it can undermine the entire production chain.

Again this has to be taken with a large pinch of salt and while Apple may not have quite been able to make the amount of units of the iPhone 5 it would have liked, whether this will result in a delay remains to be seen.

Do you think the iPhone 5 will be delayed?