Nokia was instructed by the NSW department of fair trading to repair and renew the warranties of its 8210 series phones last month.
Nokia Australia spokesperson Antony Wilson would not confirm or deny that Seiko Epson, a Japanese conglomerate of 120 companies, supplied the faulty component, citing rules that prevent the company commenting on "the performance of other companies".
However, Nokia has consistently maintained that the manufacturer of the screens would bare the cost of repairing the faulty handsets.
According to overseas reports, financial analysts estimate that the cost of repairs and replacements is between US$90.7 million and US$136 million.
Seiko Epson's electronic devices division - which includes liquid crystal displays, semiconductors and quartz products - accounts for 34 percent of its sales.
In June 2000, Seiko Epson brought Texas Instruments Japan's liquid crystal display driver chip fabrication facility to meet a sharp increase in demand for the components.
At the time the company claimed to hold 60 to 70 percent share of the global market for driver chips used for LCDs in mobile phones.
Reuters contributed to this report.
