RSS
Логотип
Баннер в шапке 1
Баннер в шапке 2
Project

Apple paid to Samsung a penalty in $950 million for purchase of too small number of OLED displays

Customers: Apple

Cupertino; Electrical and Microelectronics

Contractors: Samsung Display


Project date: 2020/07

In the middle of July, 2020 it became known that Apple paid to Samsung a penalty because of too low sales of iPhone. According to the new report of Display Supply Chain Consultants, Apple once paid Samsung of $950 million as bought much the smaller number of OLED displays for iPhone, than promised under the contract.

For the second quarter 2020 of Samsung specified the one-time cash receipt connected with division on production of displays in the report on revenue and operating profit, however did not give its size and origin. In June, 2020 the Korean edition TheElec reported that Samsung received about $745 million from Apple, however sources of DSCC claim that the payment was more, about $950 million.

Apple paid to Samsung a penalty in $950 million for purchase of too small number of OLED displays
File:Aquote1.png
Compensation from Apple helped to turn potential losses into operating profit, said in the report of DSCC. Revenue of Samsung Display dropped by 7% year on year, however the forecast of operating profit grew by 23%, having exceeded all expectations of analysts. In addition to a penalty the contribution was made also by the growing demand in the market of semiconductors connected with the growing number of data centers.
File:Aquote2.png

The similar situation arose and earlier - in the second quarter 2019 of Apple was also forced to compensate losses of Samsung when bought the smaller number of OLED displays, than agreed. Apple often signs agreements with suppliers on the minimum purchases which allow to reduce unit price. However if Apple is not possible to make these minimum purchases, contracts provide imposing of a penalty. In 2020 supply chains and demand of Apple appeared under blow of a pandemic of COVID-19 that can explain unexpected decrease in purchases. The company will provide results for the third financial quarter in which exact digits of profit and losses will be reflected on July 30, 2020.[1]

Notes