Samsung has reportedly ordered around 15 million OLED panels from China Star Optoelectronics Technology (CSOT).
These panels are expected to be used in upcoming mid and lower priced smartphones.
Samsung Display is said to have raised concerns internally in an attempt to reverse the move.
Samsung is reportedly planning to use display panels from a Chinese supplier in some of its upcoming smartphones. The move appears to be part of a larger effort by the company to reduce manufacturing costs as memory prices continue to rise. According to a report by The Elec, citing industry sources, Samsung Electronics has decided to source a significant number of flexible OLED display panels from China Star Optoelectronics Technology (CSOT). These panels are expected to be used in upcoming mid and lower priced smartphones, including models like the Samsung Galaxy A57 and future Fan Edition devices that are expected to enter production soon.
Traditionally, most OLED panels used in Samsung’s Galaxy A series phones have been supplied by its own display division, Samsung Display. The company relied on its in-house supplier to maintain consistent quality and keep the supply chain within the Samsung group. Only a few of the affordable phones used panels from outside vendors.
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However, things appear to be changing as production costs rise. One of the biggest reasons is the increasing price of memory components used in smartphones. Since memory prices are largely fixed and difficult to negotiate, Samsung seems to be looking at other areas where it can cut costs.
Industry estimates suggest that OLED panels from CSOT can be at least 20 per cent cheaper than those supplied by Samsung Display, as per the report. Samsung’s mobile division reportedly ordered around 15 million OLED panels from the Chinese supplier for upcoming devices. The decision has reportedly created tension within the Samsung group. Samsung Display is said to have raised concerns internally in an attempt to reverse the move.
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Apart from reducing costs, some industry officials believe Samsung may also be trying to diversify its supplier network.
Samsung shipped around 240 million smartphones last year, with mid-range and budget devices such as the Galaxy A series accounting for more than half of that number. If CSOT continues supplying panels for these models, it would make the Chinese display maker a major supplier for one of the world’s largest smartphone brands.
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