Report: Apple Pays $ 950 Million to Samsung

It is about unfulfilled commitments for the acceptance of OLED panels. The triggers are apparently declining iPhone sales as a result of the corona pandemic. Samsung Display allegedly only achieved an operating profit in the second quarter with the help of a fine.

Apple is expected to pay a $ 950 million fine Samsung have dissipated. At least that’s what the consulting company Display Supply Chain Consultants (DSCC) reports. Accordingly, Apple should not have met contractual obligations to purchase OLED display panels.

iPhone XS Max, XS and XR 2018 (screenshot: relies, among other things, on a report by the Wall Street Journal, according to which the operating profit of Samsung’s display division in the second quarter includes a one-off income of an undisclosed amount. In addition, the consultants refer to another media report speculating on Apple’s fine of around $ 745 million.

It is known that Apple – like other companies – secures certain production capacities from suppliers in advance. Contractual penalties are payable as soon as certain minimum purchase quantities have not been met for a specified period. DSCC believes that, among other things, the closings of Apple’s own stores during the corona pandemic have impacted iPhone sales to such an extent that Apple was unable to meet its contractual obligations. In this case, the economic damage from a contractual penalty for Apple would have been less than the disadvantages from an iPhone overproduction.

Samsung, in turn, is compensated for the loss of revenue and costs for the production capacities held. “Apple’s payment has probably turned what would otherwise have been an operating loss for displays into an operating profit. Payment in the second quarter follows the pattern from a year ago, when DSCC estimated that Apple Samsung paid 900 billion won for a shortfall in OLED panel orders in the second quarter of 2019, ”said the consulting firm’s blog entry.

The balance for the second calendar quarter should reveal how strongly the global Corona crisis has affected Apple’s sales figures. The iPhone manufacturer will present it on July 30 after the market closes. A day earlier, Samsung will provide current financial data that will provide information as to why the company’s preliminary figures show that it expanded its profit in the second quarter.

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