A new report from Nikkei today explains that by lowering iPhone X orders, Apple has left Samsung scrambling to find new customers for its OLED panels. The report explains that Samsung initially ramped up production to meet demand for the iPhone X, but now faces excess capacity as Apple reportedly cuts the device’s production…
Ecobee HomeKit Thermostat
Nikkei says Samsung had hoped that in conjunction with Apple ordering OLED panels for the iPhone X, other smartphone makers would also make the switch. In reality, however, manufacturers have stuck with LCD panels due to the price of OLED screens.
Furthermore, Samsung reportedly faces increased competition from Chinese OLED panel makers, who are rapidly expanding production capacity and putting pressure on Samsung to lower its pricing.
As for Apple specifically, Nikkei again says that Apple will cut iPhone X production by “half” this quarter, which means Samsung is left with excess production of its OLED panels and essentially no one to buy them.
“Samsung is increasingly selling OLED panels to outside clients,” said an official at an electronics trading company in Tokyo. Production of the iPhone X, whose sales have been sluggish, is expected to drop by half in the first three months of this year from the initial estimate of over 40 million units.
Having ramped up production capacity to meet demand for the latest iPhone, the first model to incorporate the panels, Samsung is now saddled with excess production capacity
This isn’t the first time Nikkei has claimed that Apple will cut iPhone X production in half. Last month, the supply chain outlet said that Apple’s decision was in response to “disappointing holiday season sales,” which sent Apple stock down by over 2 percent at the time.
Making matters worse for Samsung, reports have indicated that LG is on the hook for supplying OLED screens for Apple’s upcoming 6.5-inch iPhone later this year. Apple has long tried to reduce its dependence on Samsung, and as more manufacturers build out their OLED infrastructure, it shouldn’t necessarily come as a surprise that Apple is looking to move away from the South Korean company.
FTC: We use income earning auto affiliate links. More.