A reduction is OLED panel order for the iPhone X from Apple has left Samsung scrambling to find new buyers for their OLED panels. Due to a reduction in orders from Apple, the Korean tech giant is potentially looking at an excess stock of OLED panels. Before the launch of iPhone X, Samsung had to ramp up its OLED production to meet its huge demand because the company was the sole supplier of OLED panels for Apple’s flagship smartphone.
Samsung had expected that other OEMs in the market will follow Apple’s suit and switch to OLED panels. However, that did not happen and now Samsung is stuck with an excessive stock and production capacity. The situation has forced Samsung to look for new OLED buyers.
Th report also adds that, due to sluggish sales, Apple is cutting down the sale of its iPhone X smartphone in the first quarter of 2018. It is not the first time the company has done so. Apple has been known for reducing its flagship device’s production in the quarter following the holidays season due to weakening demand.
An official from an electronics trading company in Tokyo said that “Samsung is increasingly selling OLED panels to outside clients.” The overall production of iPhone X is expected to drop by half in the first quarter of this year from the initial estimate of 40 million units.
The report also adds that the OLED panel from Samsung costs over $100 which makes it very expensive for most of the OEMs. This is why OEMs stick to LCD panels for their devices that usually costs around $40. With OLED panel costing so much, it’s not feasible for mid-range smartphone manufacturers to feature OLED panel on their devices as it would lead to an increase in the price.
Samsung currently holds the crown in the OLED market with a market share of 95 percent. However, the Korean giant will definitely feel the heat in coming years from the likes of BOE and LG Display who are setting up their own OLED manufacturing facilities.
Apple is expected to launch at least two new iPhone models in 2018 feature OLED panels. This should further increase the demand for OLED panels in coming years. Following Apple’s footprint, many other OEMs will start thinking about switching to OLED panels as well and with ane excess production capacity, Samsung might just have to reduce the price of its OLED panels to secure new buyers.
Via [Nikkei]
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