Samsung received $683 million from Apple for unfilled orders of iPhone OLED panels

As we previously reported, Apple is on the hook for missing contractual purchasing obligations concerning Samsung-built OLED display panels bound for iPhones. According to Samsung’s earrings guidance released Friday, the Galaxy maker has actually received a cool $638 million from the Cupertino firm during the June quarter after Apple couldn’t fulfill its previously agreed-upon purchasing order volume and no middle ground could be found.

As for Samsung’s earnings guidance for the three-month period ending in June, the firm’s operating profit likely dipped to 6.5 trillion won, or about $5.5 billion, the South Korean company said in a regulatory filing. According to CNBC, the result beats industry estimates but represents a year-over-year decline of 56 percent.

Sanjeev Rana, senior analyst at CLSA, says that, excluding that one-off, Samsung’s smartphone business performance was “worse than expected”. The company’s semiconductor business did somewhat better than market expectations but its bread-and-butter memory chip business continues to experience ongoing weakness.

Analysts polled by Reuters said that the estimated 800 billion won for unfulfilled orders Samsung received from Apple in the June quarter was a one-time payment, potentially suggesting no additional monetary penalties in the future. Earlier this week, ETNews reported that capacity utilization rate at Samsung’s A3 display plant which exclusively manufactures flexible OLED panels for Apple fell below 50 percent because Tim Cook & Co. had to decrease orders because OLED iPhones have not been selling as well as Apple has hoped they would.

We don’t know how many OLED units Apple has committed to purchase in its supply contract with Samsung’s display-making arm, but industry sources expect the manufacturer to churn out about a hundred million iPhone OLED panels annually.

The Korean report added that Apple may also order additional Samsung-made OLED panels for “tablets and notebooks”.

Now, revered Apple analyst Ming-Chi Kuo has called for a new MacBook model in this year said to rock a sixteen-inch screen with a display resolution of 3,072 x 1,920 pixels, but that rumored machine is said to utilize LCD display technology. Apple notebooks and tablets with OLED panels could, however, start arriving in 2020, industry sources have it.

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