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As Apple (AAPL) - Get Apple Inc. Report prepares to start using OLED display technology in its iPhones, there will be plenty of beneficiaries, including Applied Materials (AMAT) - Get Applied Materials, Inc. Report .

Just last week, Santa Clara, Calif.-based Applied Materials revealed in its second-quarter earnings that OLED orders were at an all-time record.

OLED, or organic light-emitting diode, is creating significant opportunities for Applied Materials, said company president and CEO Gary Dickerson on the company's earnings call with investors, asserting that the chip supplier's opportunity in OLED is over 3 times larger than the traditional LCD market. While more difficult to build than LCD, OLED displays offer better color contrast and more bendability.

"I believe we're still in the very early innings of OLED, but we're already seeing a significant impact on our business," Dickerson said during the call.

In the backdrop of a somewhat shaky smartphone market, phone makers are turning to new technologies such as OLED to attract consumers.

Apple's iPhone 7 is expected to have OLED display features when the products get rolled out next year.

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This OLED ramp should be positive for Applied Materials, Advanced Energy Industries (AEIS) - Get Advanced Energy Industries, Inc. Report and MKS Instruments (MKSI) - Get MKS Instruments, Inc. Report , according to analysts.

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OLED will be a nice growth driver for the three suppliers, D.A. Davidson analyst Tom Diffely said via phone Friday while acknowledging that it won't necessarily be a huge needle mover.

For Applied Materials, for example, about 7% to 8% of its business comes from the flat-panel display business that is moving OLED forward. OLED has the potential to make up about 15% to 20% of Applied Materials' business, according to Diffley.

"It will be a nice incremental piece" of growth, he added.

In a note on Thursday, Pacific Crest Securities analyst Wes Twigg recommended Applied Materials and MKS Instruments on the basis of the OLED opportunity, adding that Advanced Energy Industries is also well-positioned.

"We believe Sharp, Japan Display, JOLED, AUO and LGD are all planning to add either pilot or production capacity in 2017/2018, and at least five Chinese companies are preparing for new capacity, [with] new pilot orders beginning," he noted. 

(Japan Display is a joint venture by Sony (SNE) - Get Sony Corp. Report , Toshiba and Hitachi while JOLED was founded by Sony, Panasonic and Innovation Network Corp. of Japan. AU Optronics (AUO) is an electronics manufacturer in Taiwan.)

Applied Materials, which had display orders worth $700 million last quarter, will likely see display equipment demand fall moderately in the second half of the year. But it should stay well above historical levels through 2018, according to Twigg.

Twigg added that on the other hand, the shift to OLED screens may also create uncertainty and headwinds for Synaptics (SYNA) - Get Synaptics Incorporated Report , whose products could get displaced in the iPhone 7.

Shares of Applied Materials are up about 3.2% Friday late morning to $24.49 a piece. Advanced Energy is up 1.3% to $27.62 per share, while MKS Instruments shares rose about 0.8% to $40.34.