According to industry sources, Samsung Display plans to terminate its contract with Apple. This means that the Korean company will no longer supply liquid crystal display panels to its longtime partner and therefore, the major competitor. The sources speculate about the rift between the two companies, which had shared a strong partnership in electronic components.
Samsung’s decision to cut its years-long business ties with Apple is driven by the fact that Fruit Company is no longer a cash-generator due to its inflexible supply-chain management structure.
The extract from the report by KoreanTimes reads:
“The Cupertino, California-based firm has been lowering its reliance on Samsung-manufactured displays for use in its popular i-branded devices as it is leveraging its influence to source components from Samsung’s rivals attracted by better pricing.
“We are unable to supply our flat-screens to Apple with huge price discounts. Samsung has already cut our portion of shipments to Apple and next year we will stop shipping displays,” said one senior industry official, asking not to be named, Monday. “
Rendering several sources contacted by The Korea Times, Amazon and Samsung Electronics’ handset division are both increasing their orders for tablet displays. This probably is a sufficient substitute for possible losses, caused by cutting the relationship with Apple.
According to the DisplaySearch, a market research company, Samsung Display has shipped over 15 million LCDs, while its biggest rival LG Display only 12.5 million, followed by Japan’s Sharp with 2.8 million. So Samsung Display has been the top supplier to Apple as of the end of the first six months of this year.