The slow demand for iPhone X is hurting Samsung’s OLED display business, reports Nikkei. As a result, the Korean tech giant has slashed the production of iPhone X display panels by as much as 20 million units while seeking out for new customers.
Last year, Samsung invested $12.6 billion to boost its OLED production capacity to meet the anticipated high demand for the iPhone X which unfortunately didn’t happen. Now, the company is reportedly left “saddled with excess production capacity”.
The production for the iPhone X is expected to drop by half in the first three months, from the original 40 million target. There may also be additional cutbacks in the coming months if the sales for the iPhone X continues to slump.
Other smartphone makers Samsung had hoped to incorporate OLED displays for their smartphones is also sticking to LCD for most of their phones due to it being less expensive than the OLED display panels. This will help them maintain low prices for their midrange offerings which have been the most active market for smartphones.
“Using OLED panels makes it difficult to compete with rivals on price,” said Hiroshi Hayase, senior director at IHS Markit.
To make matters worse, Samsung is also facing some serious competition with Chinese OLED panel makers which have been swiftly expanding their production capacity. South Korean rival, LG Display, is also set to launch a new production line as early as this year.