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

Posted February 21, 2018

Samsung Electronics will slash output of its organic light-emitting diode (OLED) panels in response to its customer Apple's decision to cut production of iPhone X amid weak demand, the Nikkei reported on Tuesday. A new report coming out of Asia claims that Samsung is cutting the OLED panel production by more than 50% for the January-March quarter.

The company has yet to decide its production target for the April-June period, but a further cutback may be in store. Anticipating a demand surge from Apple, the company made a 13.5 trillion won ($12.6 billion) capital investment previous year, resulting in a 1.5 trillion won increase in depreciation costs in 2018, the Nikkei reports. Do you guys think Apple will soldier on with the iPhone X design?

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Reuters/Stephen LamAn attendee checks out a new iPhone X during an Apple launch event in Cupertino, California, U.S. It means we could see more mid-range Android smartphones with OLED screens in the near future.

The local carriers sold discounted iPhones, particularly iPhone 6 and 6s, to clear the inventory and to be honest, these devices came with a lot of value attached to them. Sources told Nikkei that Samsung's display arm will likely see a profit decline in the first half of 2018.

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Apple's struggle with the iPhone X is affecting production of other parts as well, bringing down memory-chip prices. Not only would that secure Apple's supply chain - given the terms of the deal apparently earmarked it all the panels it wanted - it would have a side-benefit of reducing its dependence on arch-rival Samsung. The total average daily sales of iPhone 8 and iPhone X is 120 percent the sales of iPhone 7.

On Average, in 2017 Samsung had a market share of 56.2 percent, Apple 17.7 percent, and LG 17.4 percent.

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