It's a strange turn of events but such is life. Samsung Display and Apple are having a psychological warfare regarding a penalty issue due to a contract they both had signed and failed to fulfill on both ends.
Apple currently has to pay Samsung Display hundreds of millions of dollars in penalty for failing to secure certain amount of supplies of flexible OLED panels for its new iPhones, falling short of the contract. In other words; Samsung Display is penalising Apple for noy buying enough iPhone displays.
Meanwhile Samsung Display is also going through an issue where some of its panels that were supplied to Apple experienced quality issue. As a result, both businesses are looking for a way to minimise the damage they're in.
According to industries and stock firms, Samsung Display has had many discussions to solve a penalty issue that is worth hundreds of millions of dollars but have yet to find a clear solution.
After all, Samsung Display feels that it should be compensated for its troubles. Apple, understandably, isn’t keen on paying the penalty. It has offered some other options instead. They include sourcing OLED panels for other products like tablets and notebooks.
According to Apple’s request for supply, Samsung Display had invested into A3 plant over two years. A3 plant, which can produce 105,000 6th generation flexible OLED panels per month, was constructed ‘exclusively for Apple’. The exact amount that Apple guaranteed from Samsung Display is not known. However, industries predicted that Samsung Display would produce about 100 million OLED panels for Apple annually.
Some heard that Samsung Display actually received hundreds of millions of dollars in penalty from Apple already. If it did receive a penalty from Apple, there is a chance that its performance will improve as the corresponding penalty will be applied to its operating profit in the second quarter.
But for now, Samsung Display is keeping such information quiet. “It is difficult for us to make information regarding our customers public,” they said. “We cannot also disclose information regarding our performance as we have yet to announce our performance for the second quarter.”