Samsung Display likely to receive compensation from Apple over order shortfall

Samsung Display Co., a major display panel maker in South Korea, is likely to receive compensation from Apple Inc. over a shortfall in OLED panel orders, industry insiders said Tuesday.

Samsung Display's worldwide small OLED shipments in January dropped 9 percent month-to-month to 45 million units, according to market researcher Omdia, which added that the decline is apparently prompted by sluggish sales of Apple's iPhone 12 mini. 

Foreign media have reported that Apple has adjusted target production of the iPhone 12 series to 75 million units for the first half of this year, which is about 20 percent down from its previous target, with the iPhone 12 mini responsible for the majority of the cuts.

Samsung Display is the sole supplier of a 5.4-inch panel for the iPhone 12 mini, the smallest model of Apple's 5G-supporting iPhone 12 series.

Industry observers are now predicting that Apple may once again have to pay Samsung a hefty penalty for not meeting the minimum order quantity.

Apple reportedly paid an estimated $684 million in 2019 and $1 billion in 2020 to Samsung Display for below-par 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 said on condition of anonymity.

Samsung Display, an affiliate of Samsung Electronics Co., has been the world's leading smartphone panel vendor while dominating the supply of displays for Apple's iPhones.

According to Omdia, global OLED panel shipments reached 53 million units in January, and Samsung Display accounted for 85 percent of them. (Yonhap)