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Samsung plans to terminate LCD supply contract with Apple

post #1 of 162
Thread Starter 
Starting next year, Samsung will no longer supply LCD screens to Apple, as the rift between the rival technology companies continues to widen.

Samsung announced on Monday that it would terminate the existing contract with Apple and will no longer ship liquid crystal display panels, ending a longtime partnership between the two companies, The Korea Times reported on Monday. Citing an unnamed Samsung official, the report revealed that Samsung has already cut its portion of shipments to Apple, and beginning in 2013 it will stop shipping LCDs to Apple entirely.

The Korean electronics maker apparently plans to offset the loss of Apple as a customer by selling more displays to its own handset division, as well as retailer Amazon, which sells the Kindle Fire HD tablet.

The change will represent a major shakeup in Apple's supply chain, as the iPad maker bought more than 15 million LCDs from Samsung in the first six months of 2012. That made Samsung the largest LCD supplier to Apple, topping LG Display's 12.5 million screens and Sharp's 2.8 million.

Retina Display


However, Samsung reportedly shipped less than 3 million LCDs to Apple in the third quarter of 2012. In the current fourth quarter, Samsung's shipments are expected to drop to just 1.5 million.

Earlier this year, Samsung was said to be the only company that could produce high-resolution Retina displays for Apple's third-generation iPad. While Samsung was the only Retina display provider at the device's launch, LG and Sharp eventually joined in Apple's supply chain.

The relationship between Samsung and Apple has been unique, as the two companies are fierce competitors while Samsung has also been the largest supplier of components to Apple. Tensions between the companies boiled over last year, when Apple sued Samsung and accused the company of copying the look and feel of the iPhone and iPad. Since then, the number of lawsuits has proliferated across the globe.

Samsung's apparent plans to cease shipping LCD screens to Apple comes soon after a rumor indicated that Apple has become more "serious" about moving chip production away from Samsung. The custom chips found in Apple's iPhone, iPad and iPod touch are built by Samsung in Texas, but Apple plans to move production away from Samsung, potentially handing chipmaking responsibilities over to Taiwan Semiconductor Manufacturing Co.
post #2 of 162
Quote:
Originally Posted by AppleInsider View Post

However, Samsung reportedly shipped less than 3 million LCDs to Apple in the third quarter of 2012. In the current fourth quarter, Samsung's shipments are expected to drop to just 1.5 million.
Earlier this year, Samsung was said to be the only company that could produce high-resolution Retina displays for Apple's third-generation iPad. While Samsung was the only Retina display provider at the device's launch, LG and Sharp eventually joined in Apple's supply chain.

 

I'm sure Sharp and LG send their thanks.

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   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

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post #3 of 162
good luck SAMSUNG, that might be the worst mistake you have made...
post #4 of 162

As the biggest threat to Apple, who sells 100% of what they can manufacture, is not being able to manufacture in great numbers, I would say this is not only bad for Samsung.

post #5 of 162
Quote:
Originally Posted by John.B View Post

 

I'm sure Sharp and LG send their thanks.

However the consumer won't, Sharp and LG have been riddled with quality issues. There still are issues with LG's Retina display for the macbook. Samsung's have none. Every launch they've been there to pick up the slack. I'm all for getting away but it will be very interesting to see launches go moving forward. 

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I'm not a pessimist. I'm an optimist, with experience.
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post #6 of 162

"I'm Fired?!  Well I Quit!"   LOL

post #7 of 162

I am absolutely stunned they would do this.  I mean, it's not as if Apple has done anything to them.  

post #8 of 162
Just as Apple have purchased a few companies to give them control over the design and fabrication of their CPUs, so they may have to purchase or take a controlling stake in a display vendor - and LG, whose handset division is having a hard time being taken seriously today, may be ideal. LG could also embed iOS into their TVs.

With flexible displays the next big thing, and Samsung already way ahead on this, if Apple are unable to source such technology, they must produce it using any 3rd party IP or their own ideas that don't breach any of Samsung's display patents.
post #9 of 162
Screw Samsung. I'd rather my stock took a short term hit because of supply issues rather than apple pay these scumbags another dime!
post #10 of 162
Quote:
Originally Posted by AppleInsider View Post


Samsung's apparent plans to cease shipping LCD screens to Apple comes soon after a rumor indicated that Apple has become more "serious" about moving chip production away from Samsung. The custom chips found in Apple's iPhone, iPad and iPod touch are built by Samsung in Texas, but Apple plans to move production away from Samsung, potentially handing chipmaking responsibilities over to Taiwan Semiconductor Manufacturing Co.

 

So, in response to Apple changing to a different chip supplier, Samsung drops Apple screen supplies?

 

The cost of saving face, I guess.

post #11 of 162
This sounds like sour grapes to me. By the description, Apple has already moved most of their business away from Samsung. Seems like Samsung is just slamming the door and yelling about it after the fact.
post #12 of 162
Quote:
Originally Posted by Rayz View Post

 

So, in response to Apple changing to a different chip supplier, Samsung drops Apple screen supplies?

 

The cost of saving face, I guess.

 

Actually Apple has been moving orders away from Samsung throughout the year; from some 15 million down to just over 1 million. By Q1 2013, all their LCDs will be from other suppliers. Samsung "terminating" some contract they had with Apple is moot. Long term, this hurts Samsung more than Apple; they are losing their biggest customer.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #13 of 162

I hope Apple takes a dump all over Samsung.  Apple practically jump-starts Samsung's mobile business and Apple gets back-stabbed for its pains.  I just hope that Apple is able to get the quality and production rates from other companies when it comes to displays.  I guess Samsung is very happy that its mobile business is doing so well and they don't need Apple's business anymore.

post #14 of 162

So much for the "firewall".

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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post #15 of 162
I guess this set ups Apple to begin the final stages of producing the TV we've all been waiting for. I'm sure the AppleTV will give Samsung a run for their money. And since they're in this divorce, copying will not be an option for Samsung.
post #16 of 162

Didn't Panasonic announce they were getting out of the TV business with hopes of landing Apple as a customer for displays? Between them, LG, Sharp, and perhaps Sony, I don't think Apple is going to be hurt by this much.

 

Samsung is definitely cutting it's nose to spite it's face. Not a good strategy. The Android market is fickle. While Samsung owns them now, any one of the other vendors could become ascendent at any time. By putting all their eggs in one basket, that being to offset the loss of Apple by supplying more to their own mobile division, is a risky gamble at best.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply
post #17 of 162
How about Apple get the knowhow and build it's own foundries? They have the money, and it would insulate them from third parties competing directly, or infringing on Apple's ip like Samsung has done among its subsidiary companies. I'm sure this would not happen overnight though, and it's a very expensive proposition. Having to source the raw materials, the very expensive tooling required to etch the silicon, not to mention all the electricity Apple would require, and that they probably won't be able to source entirely from green technologies.
post #18 of 162
Quote:
Originally Posted by Constable Odo View Post

I hope Apple takes a dump all over Samsung.  Apple practically jump-starts Samsung's mobile business and Apple gets back-stabbed for its pains.  I just hope that Apple is able to get the quality and production rates from other companies when it comes to displays.  I guess Samsung is very happy that its mobile business is doing so well and they don't need Apple's business anymore.

It's a fickle market unless you have an insanely loyal user base such that apple enjoys.

Samsung could get knocked off the top spot in the Android market at any moment, when that happens they will regret making enemies with Apple.

post #19 of 162
Quote:
Originally Posted by Tulkas View Post

Didn't Panasonic announce they were getting out of the TV business with hopes of landing Apple as a customer for displays? Between them, LG, Sharp, and perhaps Sony, I don't think Apple is going to be hurt by this much.

 

Samsung is definitely cutting it's nose to spite it's face. Not a good strategy. The Android market is fickle. While Samsung owns them now, any one of the other vendors could become ascendent at any time. By putting all their eggs in one basket, that being to offset the loss of Apple by supplying more to their own mobile division, is a risky gamble at best.

 

I think the Panasonic rumor was caused by someone getting their story wrong. Apple is actually going to buy Panasonic.

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post #20 of 162

*gasps* I'm just ..... shocked beyond belief.

post #21 of 162
I think this isn't quite what it seems, at least based on some of the comments. Everyone knows Apple is moving away from Samsung as a supplier, and LCD screens are no exception, which appears to be supported by the numbers provided in the article. So I believe Sammy is trying to spin this as a choice they made rather than what it is, which is Apple will stop using Samsung as an LCD supplier in 2013. Apple made a huge investment in Samsung's LCD production last decade and it can be argued that Samsung's current standing in the LCD market was directly related to that investment. With Apple now shifting cash to other LCD manufacturers, it's likely these companies will grow quickly to meet Apple's supply requirements. This likely means new and/or retooled existing plants that will also likely produce LCDs for other customers. This is very bad for Samsung as they've not only lost one of it's biggest clients, but they will now need to slow production and possibly close existing plants - Amazon, etc simply do not sell the volume of tables to replace the lost Apple represents. Apple has a long and clear history of leaving suppliers it believes have slighted them and Samsung's management should have anticipated this.
post #22 of 162
Quote:
Originally Posted by Srice View Post

"I'm Fired?!  Well I Quit!"   LOL

Ha! Exactly!
post #23 of 162

In a way it's a shame. Samsung makes really good LCD panels. But in time I think the competition will catch up, especially with piles of cash from Apple paid upfront. Samsung keep pushing their crappy Pentile displays in the meantime which are currently vastly inferior IMO. All of this sounds to me that the settlement or licensing discussions didn't get too far and they were way apart. Hopefully Apple will turn up the heat and crank out killer phones generations more advanced than Samsung.

 

One thing I know is that Apple won't compete with Samsung on Washer/Dryer combos.

post #24 of 162

Funny how all these news stories position this as "Samsung dropping Apple".   When in reality Apple has brought LG, Sharp and Japan Display (consortium which includes Sony) online in volume over the last year.  With Panasonic waiting in the wings 

 

Apple accounted for 10% of Samsung's total sales this year.  All that is going away   

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post #25 of 162
Quote:
Originally Posted by Srice View Post

"I'm Fired?!  Well I Quit!"   LOL

post #26 of 162

Who cares about the $1B judgement Apple won?

Regardless, Samsung's shennanigans cost them many billions, especially when you think about the value of Apple as a Samsung customer year over year. Who cares if they ever have to pay Apple what the court awarded? 

 

It's disappointing. Like Apple/Google, Apple/Samsung made and could have made some outstanding products together.


Edited by burtonman - 10/22/12 at 8:58am
post #27 of 162
Quote:
Originally Posted by thataveragejoe View Post

However the consumer won't, Sharp and LG have been riddled with quality issues. There still are issues with LG's Retina display for the macbook. Samsung's have none. Every launch they've been there to pick up the slack. I'm all for getting away but it will be very interesting to see launches go moving forward. 

I've looked a lot into this issue.
However, aside from some initial roll outs, I haven't seen any issues with the LGs. Currently my MacBook is 2 months old and I test it about an hour at a time with NO IR.
additionally. I use my MacBook some 10 hours a day, often with problems displayed for long periods of time.
So maybe it was an issue at launch but none here.

I even tested a LG at bestbuy. Good to go
post #28 of 162
The threat of Samsung making such announcements is exactly why Apple has been taking them out of the supply chain.
post #29 of 162
Quote:
Originally Posted by mjtomlin View Post

 

Actually Apple has been moving orders away from Samsung throughout the year; from some 15 million down to just over 1 million. By Q1 2013, all their LCDs will be from other suppliers. Samsung "terminating" some contract they had with Apple is moot. Long term, this hurts Samsung more than Apple; they are losing their biggest customer.

 

That's what I meant. This is Samsung's attempt at saving face by reporting that it is 'dropping' Apple. From where I'm standing, Apple has been cutting back on its Samsung supplies for some time now.

 

Outside of Korea and MacRumors, no one really believes this.

post #30 of 162

The real story is probably like the following:

 

1. Apple dropping Samsung as the supplier of the Retina Display

 

2. Samsung, in response, shift to modify the Retina Display and use it for Android devices

 

3. Corp Executives in Samsung make some excuses on why this is happening by making some statements regarding how Samsung is terminating supply contract with Apple.

post #31 of 162
Samsung plans to offset its loss in Apple display business by selling more displays to itself. Okay, that makes a lot of sense...
post #32 of 162
Quote:
Samsung plans to offset its loss in Apple display business by selling more displays to itself. Okay, that makes a lot of sense...

 

Until Moto or HTC or some other Android manufacturer creates the next "must have" Android phone -- then all of a sudden Samsung will have a mountain of displays and nobody to sell them to.  /thermonuclear 

post #33 of 162
Quote:
Originally Posted by thataveragejoe View Post

However the consumer won't, Sharp and LG have been riddled with quality issues. There still are issues with LG's Retina display for the macbook. Samsung's have none. Every launch they've been there to pick up the slack. I'm all for getting away but it will be very interesting to see launches go moving forward. 

 

 

Sharps pains have been related to rolling out a new facility. Sharp has been making flat panel displays longer than Samsung and can make a great display. In fact, Sharp sued Samsung over much of the same IP type claims Apple is now suing Samsung. So Apple and Sharp should be good partners. Moreover, quality is consistent with Sharp. It is the only TV manufacture who makes all of its own displays. The Internet Boards are full of unhappy Samsung buyers who brought home a TV with a lower quality display than the one found at the store. On Amazon, Sharp consistently gets the best remarks for quality. 

 

Panasonic recently said it wanted to stop selling TVs and focus on supplying companies like Apple displays. That is another potential partner. 

post #34 of 162

Samsung has best display technology. This is really bad for Apple. But I think it is basicly a ploy by Samsung to discuss better terms for their patent dispute.

post #35 of 162
Quote:
Originally Posted by AZREOSpecialist View Post

Samsung plans to offset its loss in Apple display business by selling more displays to itself. Okay, that makes a lot of sense...

I tried once to bake some cookies and sell them to myself. Somehow I didn't get rich at that time. I wonder how samsung does the trick. ;-)

post #36 of 162

I'll be very interested to see how changing chip suppliers impacts the Samsung Fab in Austin.  Apparently the $3.6 billion expansion of non-memory chip manufacturing was for the A5 and just opened in late 2011.  That's a lot of billions for a big building.

I assume it can make other non-memory chips (particularly ARM) for Samsung.

post #37 of 162
Quote:
Originally Posted by Red Oak View Post

Funny how all these news stories position this as "Samsung dropping Apple".   When in reality Apple has brought LG, Sharp and Japan Display (consortium which includes Sony) online in volume over the last year.  With Panasonic waiting in the wings 

 

Apple accounted for 10% of Samsung's total sales this year.  All that is going away   

 

You said it better than I. Apple has been slowly kicking Samsung out of all its products. It has been bringing other partners on board, often times fronting the companies money to build the needed infrastructure. Recently we read rumors of Apple looking to have other companies build its processors. Apple will not let Samsung be able to say lots of Samsung tech is in the iPhone (like it did at the California trial it lost). 

post #38 of 162

National pride at risk and it sounds like a "I dumped you first, so I win" type of comment...

 

Quote:

Originally Posted by thataveragejoe View Post

...Sharp and LG have been riddled with quality issues. There still are issues with LG's Retina display for the macbook. Samsung's have none...

 

 

From what I read, Samsung does have very high yield rates on the screens, but I am sure the production is not 100% free from defects.

post #39 of 162

re: Retina display. There is nothing Apple can do to keep Samsung from cannibalizing technology they already have their hands on. They have a proven track record on that score. The only thing cutting ties with them will do is force them to reverse engineer on their own instead of handing it to them on a silver platter.

 

Apple should have cut them off long ago.

post #40 of 162
Quote:
Originally Posted by thataveragejoe View Post

However the consumer won't, Sharp and LG have been riddled with quality issues. There still are issues with LG's Retina display for the macbook. Samsung's have none. Every launch they've been there to pick up the slack. I'm all for getting away but it will be very interesting to see launches go moving forward. 

 

I'm quite glad that my rMacBook pro I just bought has a Samsung LCD - I was somewhat reluctant to buy it because of the ghosting problem with LG displays.

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