John Paczkowski

Recent Posts by John Paczkowski

Tension on Display: Samsung May End Dwindling LCD Panel Deal With Apple

Image by Joy of Tech

Samsung will reportedly end its LCD panel supply contract with Apple, beginning next year. That’s what sources inside Samsung Display are telling the Korea Times, anyway.

Samsung Display was once Apple’s top panel supplier, but over the course of the past year, its LCD panel shipments to Apple have fallen to three million in the third quarter from 15 million in the first. By the fourth quarter, they’re expected to move lower still — to 1.5 million — as Apple shifts production to other suppliers.

The reason? According to the Korea Times, Samsung just isn’t making enough money from Apple’s display purchases. “We are unable to supply our flat-screens to Apple with huge price discounts,” a company source told the publication. “Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays.”

An interesting move, if true. And it certainly does seem plausible; Apple is known for its aggressive supply chain management and fondness for high margins. That said, it’s hard to look at the sprawling legal battles between Samsung and Apple and not conclude that they, too, play a role here. In late August, a jury awarded Apple more than $1 billion in damages after finding that Samsung infringed on the company’s patents. Clearly, there’s no love lost between the two companies, and it wouldn’t be at all surprising to hear that Apple is sourcing components from other suppliers as it seeks to wean itself from Samsung, or that Samsung is encouraging it to do so.

Apple and Samsung have not yet responded to requests for comment.

UPDATE: Samsung denies that it’s had any role in ramping down panel production for Apple. “Samsung Display has never tried to cut the supply for LCD panels to Apple,” the company said in a statement given to AllThingsD.


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