[ET NEWS] Samsung Display seems to be slowing OLED production largely due to lackluster sales of the iPhone X, Apple’s first OLED model, according to industry sources on Jan. 26.
After years of full-capacity production, the display maker reportedly lowered the operation rate of the A3 plant by 10 percent in January compared to the same period last year.
Sources attributed the rare move to the reduced supplies to its largest client Apple. The A3 plant produces 135,000 units of the sixth-generation OLED panel per month, of which 105,000 panels are supplied to Apple.
“Samsung is reducing operation at the A3 plant largely due to the remaining investors for the iPhone X,” an industry source told ET News on condition of anonymity.
Now keen attention is being paid to the plant’s operation rate in February and March that would help gauge the iPhone X sales.
Following the dull iPhone X sales, Samsung’s expansion plans for its Vietnamese plant have also been put on hold amid growing uncertainties regarding Apple’s OLED iPhone strategy.
More recently, Samsung has started marketing activities for Chinese smartphone makers as its production capacity is expected to further increase when the current L7-1 LCD plant starts OLED production in the first half of this year.
“The A3 plant is specially designed to supply panels to Apple only. Unless supplies to Apple do not recover in the coming months, it is unavoidable for Samsung to see weaker earnings this year,” another source said.
By Bae Ok-jin (withok@etnews) (firstname.lastname@example.org)
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