Samsung and its key Korean suppliers could dominate iPhone 8 supply chain for some time

Samsung Display, the display-making unit of Samsung Electronics which holds a 95 percent market share for smartphone OLED panels, should exclusively build curved OLED screens for iPhone 8 during the next two years. The Korea Herald suggested Monday that other South Korean firms have won important contracts for iPhone 8, too.

While Samsung Display will build the OLEDs for iPhone 8 itself, the company will play a vital role in procuring related components from four other Korean vendors.

“Apple will seek to diversify suppliers for the OLED model but Samsung Display and its key suppliers will dominate the supply chain for some time,” said an industry source.

Other Korean suppliers mentioned in the report include:

  • Samsung System LSI—Samsung’s non-memory chip unit will supply display driver integrated circuitry and the display chip for iPhone 8’s OLED screen.
  • STEMCO and LG Innotek—These vendors will provide the chip on films that connect the OLED display to the printed circuit board. Additionally, LG Innotek is said to supply camera modules for iPhone 8, too.
  • Interflex, BH and Samsung Electro-Mechanics—They’ll build iPhone 8’s flexible printed circuit board.
  • Samsung Electronics and SK Hynix—Both firms should supply NAND flash chips for iPhone 8.

Samsung’s System LSI is estimated to earn about 480 billion won, or approximately $422 million, from the display driver integrated circuit supply to Apple.

The report is interesting given that Apple usually diversifies suppliers of key parts.

Tim Cook & Co. relying on other Korean vendors for key iPhone 8 components could mean that suppliers from Taiwan and China have failed to meet Apple’s exacting standards of quality due to iPhone 8’s technological sophistication.

iPhone 8 mockup by Dutch 3D artist Martin Hajek for German magazine Computer Bild.

Source: The Korea Herald