Report: Samsung Display terminates LCD contract with Apple

Citing supply chain issues and financial strain, Samsung tells The Korea Times it won't sell LCD panels to Apple any longer

Samsung Display has terminated a contract to make LCD panels for Apple due to supply chain issues and financial strain, according to a news report published in The Korea Times on Monday.

The display maker is not able to supply Apple with panels at discount prices, and Samsung will stop supplying displays to Apple by next year, said the newspaper report, which cited a Samsung source. Apple's tight supply chain management structure has had a financial effect on Samsung Display, according to the report.

Samsung was a key supplier of displays to Apple for its smartphones and tablets. But there appears to be a growing rift between the companies, which compete in those markets. The companies are locked in legal battles and a jury earlier this year awarded Apple US$1.05 billion in damages in a patent infringement lawsuit against Samsung, although the South Korean firm has appealed the ruling.

Neither Apple nor Samsung Display immediately responded to requests for comment.

Other Apple display suppliers include Sharp and LG Electronics. The display has been a key innovation for the iconic iPads and iPhones. For example, the latest edition of the iPad displays images at a resolution of 2048-by-1536 pixels, which is the best of any tablet on the market. Apple is expected to announced a new iPad with a smaller screen later this week.

The screen of the iPhone 5, which started shipping last month, can display images at 1136-by-640 pixels. That is a bit less than smartphones such as Samsung's Galaxy S III, which has a 1280-by-720 pixel resolution screen.

But Apple and Samsung continue to work together on some fronts. Samsung is rumored to be manufacturing Apple's first home-designed A6 chip on the 32-nanometer process. Apple borrowed earlier processor designs from Samsung.

LG dominated the tablet panel market in 2011 with a 46 percent market share, followed by Samsung, which had a 35 percent market share, according to IHS iSuppli. The tablet panel shipments totaled 81.3 million in 2011 and will grow this year alongside tablet shipments, the research firm said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Tags business issuesAppleSamsung ElectronicsComponentsdisplays

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