Apple pays Samsung $950 million to cover OLED panel order shortfall
- jul
- 14
Apple made a similar payment last year.
What you need to know
- Apple paid Samsung $950 million.
- That's because it didn't meet obligations on OLED purchases.
- The payment turned Samsung's Q2 from a loss-making to a money-making quarter.
Apple has reportedly paid $950 million to Samsung for failing to meet its OLED purchase obligations.
According to DSCC's Ross Young:
Since Apple isn't meeting its obligations on OLED purchases from Samsung Display, Apple made another large payment to Samsung. We believe this year's payment was $950M and made in Q2. The difference between losing and making money for Samsung Display.
A new DSCC report notes that Samsung beat consensus expectations for operating profits in Q2 of 2020, but that this was only carried by the mammoth payment from Apple.
Samsung reported that its estimate of operating profit included a one-time gain related to its display business, according to a report at wsj.com, but did not disclose the amount. Last week theelec.net reported that Samsung Display is believed to have received KRW 900 billion from Apple for purchasing fewer OLED smartphone panels than required, but DSCC sources suggest that the payment is closer to US$950 million. The Apple payment likely turned what otherwise would have been an operating loss for display devices into an operating profit. The Q2 payment follows the pattern from a year ago when DSCC estimated that Apple paid SDC KRW 900 billion in Q2 2019 for a shortfall in OLED panel orders.
Ross Young recently stated that contrary to prevalent rumors, their supply chain sources could not corroborate claims that the iPhone 12 Pro would feature a 120Hz refresh display. However, recent reports from EverythingApplePro and Max Weinbach suggest that Apple had not yet made up its mind regarding the decision after 120Hz failed a series of tests on the iPhone 12.