Samsung to slash OLED panel output as iPhone X slumps

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Today Nikkei Asian Review reported that Samsung is slashing OLED production at the plant that manufactures displays for Apple.

Samsung Display, the panel-making unit of Samsung Electronics, is now planning to make OLED panels for 20 million or fewer iPhones.

A fresh report today says that the reduction in iPhone X production may be even greater ...

What may be bad news for Samsung Display, therefore, isn't necessarily bad news for Apple.

AAPL stock fell 0.89% in pre-trading.

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. On a facility that Samsung Display had dedicated to producing panels exclusively for Apple's use, it could see production rates drop to half or less.

The problem is that OLED displays are expensive.

And Samsung no longer has this display market to itself, with LG now also in the business. Samsung already makes the OLED display for the smaller Pixel 2. Earlier reports had indicated that, rather than continue to rely exclusively on Samsung Display for OLED supplies, the Cupertino firm was looking to hedge its bets and source panels from multiple providers.

In a bid to fend off the challenges by Chinese competitors, the Korean display maker aims to diversify its client base for smartphone OLED displays this year while putting focus on large-sized premium products in the TV segment, according to the official.

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. Samsung appears to be stuck with the excess OLED production capacity, but with if the Galaxy S9 sells well, they are hardly the losers in this situation.

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