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Samsung’s latest deal with Apple: 100m AMOLED displays for new iPhone

100 million 5.5 inch AMOLED displays will be produced by Samsung Display for Apple from next year on. The original rumour was heard in March: As ETNews revealed SDC is to become rival Apple’s main supplier of OLEDs for the upcoming iPhone. A deal was sLast month ETNews reported that that Apple chose Samsung Display as the company’s primary OLED supplier for its next-gen iPhone, and the two companies signed an official contract – with Flexible OLED supply for Apple’s next iPhone to begin in 2017. The contract, which was signed for 3 years has an annual value of 2.6 billion USD.

100m more 5.5” AMOLEDs mean a 40%-50% rise in Samsung’s production which was estimated between 200-250m in 2015. All reports indicate that these will be flexible AMOLEDs. Commentators have speculated about the total value of the deal, though. If we compare the estimates of IHS for the 5.1″ QHD Super AMOLED in the Galaxy S7 of USD 55.- the reported USD 26.- per unit seem low. As Apple wont settle for a value product, a 5.5” glass-based one for 26.- is already a far stretch. Now add in the extra costs for flexible displays and one wonders how this is going to work for Samsung.
display (let alone a flexible one) should cost more than $26.

Of course we have to keep in mind that SDC recently doubled its capacity for producing the flexible OLED line A3. Samsung has the means of providing such amounts of displays to Apple. More than 300 million USD recently went into expanding to 30.000 substrates per month, which will be ready to go from spring 2017.

The reports by ETNews suggested that Samsung will deliver something between 50% and 80% of all OLEDs Apple need. This leaves room for at least one other supplier. Big players in the market are now fighting to fill this spot. LG Displays looked like a promising candidate, however they have failed to prove sufficient capacity so far. Japan Displays and Foxconn are also in the race, but from our perspective it seems more than unlikely that Sharp/FoxConn will be have its OLED production up and running in early 2017.
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