Apple is rumored to have cut iPhone X production and this has apparently left Samsung with excess OLED displays.
According to a recent report, Samsung is looking for new customers for its OLED displays as it now has excess production capacity for these displays after Apple has changed its requirements.
Impact on Samsung’s OLED Business
Samsung’s OLED displays are known for their high quality and vibrant colors, making them a popular choice for premium smartphones. However, the recent cut in iPhone X production has led to a surplus of these displays. This situation has forced Samsung to seek new buyers for its OLED panels. The company is now exploring opportunities with other smartphone manufacturers and even other industries that might benefit from OLED technology, such as automotive displays and high-end televisions.
It would also appear that some of Samsung’s competitors in China are expanding their production capacity of these displays. Companies like BOE Technology and Tianma Microelectronics are ramping up their OLED production, which could lead to increased competition in the market. This expansion could potentially drive down the prices of OLED displays, making them more accessible to a broader range of products and manufacturers.
Cost Considerations and Market Dynamics
Samsung’s OLED displays retail for about $100 each, and this is one of the reasons why Apple’s iPhone X comes with a higher than normal price tag of $999. The higher price has apparently stopped some companies from using these displays in their handsets. For instance, mid-range smartphone manufacturers often opt for cheaper LCD displays to keep their costs down and offer more competitively priced products.
A normal LCD display is around 40% cheaper than an OLED display, which is a significant cost difference. This price gap is one of the primary reasons why many smartphone makers have not fully switched over to OLED technology. While OLED displays offer superior color accuracy, contrast, and energy efficiency, the higher cost can be a deterrent for budget-conscious manufacturers and consumers.
Moreover, the production process for OLED displays is more complex and requires more advanced technology compared to LCDs. This complexity adds to the overall cost and can result in lower yields, further driving up prices. However, as more companies invest in OLED production and technology advances, we may see a reduction in costs over time.
In addition to smartphones, OLED technology is finding its way into other consumer electronics. High-end televisions, smartwatches, and even laptops are beginning to adopt OLED displays for their superior visual performance. This diversification could help absorb some of the excess production capacity and provide Samsung with new revenue streams.
The reduction in iPhone X production has created a ripple effect in the OLED market, impacting Samsung and potentially benefiting other manufacturers. As the technology becomes more widespread and production costs decrease, we may see a broader adoption of OLED displays across various industries. For now, Samsung will need to navigate this surplus carefully and find new markets to maintain its position as a leader in OLED technology.
Source Nikkei
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