Samsung to cease LCD panel production for Apple as margins thin, relationship strains

It’s safe to say that this hasn’t been a year of relationship building between Samsung and Apple. Both companies spat venom and unapologetically accused the other of patent infringement. Apple ended up winning its case in the U.S., but the environment is very different in places like Korea, Japan and the U.K., where Apple either lost its infringement cases or had them thrown out.

According to a Korea Times report, Apple and Samsung are severing their LCD panel relationship. In fact, it’s Samsung that’s doing the severing, citing low margins over the high-density new iPad, which costs the Korean company considerably more to produce than the non-Retina parts on previous models. Apple has also sought out new producers such as LG, Sony and Sharp for its LCD panels, leading to lower order numbers from Samsung.

Samsung is said to be making up the lost revenue with huge orders from Amazon, in addition to increasing output for its own products such as the Galaxy Note II and upcoming 300ppi Nexus 10 tablet, which is expected to debut next week. According to the report, while Samsung was still Apple’s top LCD supplier for the first six months of 2012, its output it expected to be reduced to 1.5 million by year’s end.

Despite the drop-off in supply to Apple, Samsung is likely going to have no problem filling the production glut. Its AMOLED displays are among the industry’s most popular displays, and Samsung itself sells more smartphones than any other company. Apple has also reduced its reliance on Samsung for NAND flash memory and other internal components.

Source: The Korea Times
Via: Techcrunch