What They Say
The Korea Herald, quoting un-named ‘industry insiders’ said that Apple may have to compensate Samsung for ordering fewer displays that its target production as its volume will be 75 million for the first half of the year, down from 94 million.
Apple reportedly paid an estimated $684 million in 2019 and $1 billion in 2020 to Samsung Display for below target OLED panel orders.
“It is uncertain whether Apple would pay a penalty to Samsung Display, but considering its contract history and sluggish sales of the iPhone 12 mini, it is likely that Apple will compensate Samsung Display,”
an ‘industry official’ told the paper on condition of anonymity.
As we reported last week, the iPhone Mini is not doing as well as hoped and Samsung is said to be the sole supplier. (Samsung Display’s OLED shipment dropped 9% from low iPhone 12 Mini sales)
What We Think
This kind of deal has probably been essential for Apple to persuade Samsung to commit to some of its investments in capacity and to ensure the supply if Apple reaches its optimistic targets. (BR)
