Ever wondered what kind of components the iPad clones made in China use? Well, now we have a glimpse into the clone market and it seems that the companies making these devices rely on technology that was rejected by Apple. These second grade panels didn’t pass the quality checks of the Cupertino giant.

9.7 inch IPS panels that were refused by Apple are now being shipped to Chinese vendors, according to Taiwanese suppliers. LG Display and Samsung Electronics are the main suppliers for these parts, having shipped 12-15 million of them in Q2, while 7-9 million iPad 2s have been shipped in the same time frame.

There are three types of these panels: those that failed to meet the requirements, those sent to Foxconn for extra shipments in Q3 and those sold to tablet makers in China. There are also examples of the resulting tablets in the report, such as the T10 Android 2.2 slate made by Chinese vendor SmartDevices.

The T10 retails for $293, almost half the price of the iPad 2 base model, that sells for $570 in China. As the same time, we find out that Apple has the control over 60% of the world’s touch panel supply and they supposedly pay upfront to get their require components even when the supply is short.