Samsung Display Terminates LCD Contract with Apple (Updated)

Samsung Display Terminates LCD Contract with Apple

Update: We've finally received the official word from Samsung, and we quote: "Samsung has no plans to cease LCD panel supply relationship with Apple". Guess we'll have to wait and see if this statement rings true in the months to come. Samsung used to be the only supplier for Apple's Retina Displays used in their third-generation iPads (discontinued on 23rd October 2012), although Sharp and LG have since joined that supply chain as well. There are also rumors that Apple is buying LCD screens from AU Optronics and LG Display for the iPad Mini, according to a report filed by Bloomberg.

Samsung Display will terminate its contract with Apple Inc, according to a news report filed by The Korea Times. The South Korean display manufacturer will no longer supply LCD panels to its long-standing partner based on statement given by a senior Samsung official, thus cementing speculations on whether the deal between the two firms would eventually be dissolved. This fallout is inevitable, as one might think, at the rate the two CE titans are squabbling over their ongoing patent wars. 

The report goes on to say that the display panel maker plans to severe business ties with Apple "as it believes its American partner is no longer a cash-generator due to the iPhone maker’s stiffer supply-chain management structure". As for the Apple camp, the Cupertino firm has taken steps to reduce its reliance on Samsung's displays by sourcing for better deals from Samsung's competitors. According to market research firm DisplaySearch, Samsung Display has shipped over 15 million LCD panels to Apple in the first six months of 2012, followed by rival LG Display with 12.5 million, and Sharp Electronics with 2.8 million.

"We are unable to supply our flat-screens to Apple with huge price discounts. Samsung (in reference to the parent company) has already cut our portion of shipments to Apple, and next year we will stop shipping displays (sic)", said the unnamed Samsung official. The spokesman added that Samsung shipped less than 3 million units to Apple during the third quarter of this year, and Samsung Display is also expecting quarterly shipments in the fourth quarter to drop to approximately 1.5 million.

Over the years, Samsung has supplied LCD displays to Apple for products like the MacBook Pro with Retina Display and the iPad. It is also rumored that Amazon and Samsung Electronics' handset division have been increasing their orders with Samsung Display, mainly for LCD display panels used in tablets. This is probably sufficient to mitigate Samsung's losses inflicted by the terminated contract with Apple.  

Source: The Korea Times

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