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Samsung and Apple have a deal where Apple will buy OLED screens from Samsung. But after choosing LG screens, Apple had to pay about $1 billion fine to Samsung.
According to DSCC report, this fine to be paid by Apple will turn Samsung Display’s operating loss into operating profit.
Premium smart phone manufacturer Apple has to pay to pay a one-time payment of $1 billion dollars to Samsung Display.
A report by Display Supply Chain Consultants (DSCC) stated that the earnings of Samsung had exceeded the expectations due to Apple’s one-time payment of 950 million dollars for purchasing LED smart phone panels. The report was made by looking at the report released by Samsung.
Another report had stated that South Korea’s Samsung had received 900billion South Korean Won approximately $750 million from Apple.
According to DSCC, this report could mean that Apple’s sales did not meet the expectations due to the global pandemic caused by the Coronavirus. The sale of smart phones had been impacted multifold due to the pandemic and Apple is not any exception.
Apple is required to buy certain LED screens from Samsung and is required to pay fine if Apple does not purchase the given number of screens.
Till 2018, Samsung was the sole supplier of digital OLED screens for Apple but in September 2018, Apple had chosen its second supplier to be LG.
This is not the first time such incident happened. Last year too Apple faced a penalty for not buying OLED screens as decided. Apple reportedly paid $684 million penalty last year. Fall of sales due to COVID-19 is expected to have resulted in Apple not meeting the OLED screen requirement.
Apple is also expected to shift its supplier from Samsung to China’s BOE Tech as its biggest OLED supplier for its iphone 12 series. In 2020, Apple is expected to launch four iphone 12 models with 5G network support. All the four iphone 12 5G models are expected to have OLED displays.
By Gayatri Yellayi
