Published: Wed, February 21, 2018
Hi-Tech | By Kristin Zimmerman

Samsung to slash OLED panel production due to weak iPhone X demand

Samsung to slash OLED panel production due to weak iPhone X demand

The Samsung group unit is looking to offset the impact by securing more orders from Chinese and other customers.

Last year, Samsung invested $12.6 billion to boost its OLED production capacity in anticipation of an iPhone X boom that never came.

That's after Apple reportedly told suppliers in January that it had cut its iPhone production targets by 50% to 20 million.

To sprinkle salt on the proverbial wound, Samsung is also facing stiff competition from rival manufacturers.

In a follow-up story, Nikkei says that Samsung chose to cut OLED screen production in response to Apple's decision to reduce iPhone X orders.

For the second time in a matter of days, a report from Asia claims that Apple's iPhone X is seriously hurting Samsung. For the October-December quarter of 2017, the company had registered an operating profit of 1.41 trillion won, which was down from 1.7 trillion won in April-June quarter of the a year ago.

Experts say the high price of the iPhone X - Apple's most expensive handset yet - and its "lack of interesting innovations" could deter many buyers.

Samsung Display is extending its marquee full-screen display design to mid-range smartphones as part of efforts to further improve profitability, according to industry sources on February 20. At $110, it's estimated to account for almost a third of the iPhone X build cost.

And Samsung no longer has this display market to itself, with LG now also in the business.

Maybe the company should be lobbying Google.

The iPhone X was the first phone to get a major design overhaul since the launch of the iPhone 6 in 2015, and many expected it to lead to blockbuster sales. With the 2018 iPhone range likely to double-down on that strategy, Apple's goals will only further diverge from those of component providers like Samsung Display.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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