Apple Pays Samsung an Estimated $950 Million for Missing OLED Panel Purchase Targets

Apple in the second quarter of 2020 paid Samsung approximately $950 million for not meeting OLED panel purchase goals established in agreements between the two companies, according to display analysts at Display Supply Chain Consultants.

pay samsung 950mil feature 1
Samsung last week shared guidance on revenue and operating profit for the second quarter of 2020, which included a one-time gain related to its display business. The one-time payment is believed to be from Apple, caused by Apple purchasing fewer than expected OLED panels for smartphones during the second quarter of the year.

Samsung reported that its estimate of operating profit included a one-time gain related to its display business, according to a report at wsj.com, but did not disclose the amount. Last week theelec.net reported that Samsung Display is believed to have received KRW 900 billion from Apple for purchasing fewer OLED smartphone panels than required, but DSCC sources suggest that the payment is closer to US$950 million.

During Apple's third fiscal quarter, or second calendar quarter, many of its retail stores in the United States in other countries around the world were closed for several months, which, along with economic uncertainty, likely had a major impact on sales. Even now, many stores in the U.S. have been forced to close again as coronavirus outbreaks have continued to spike.

The payment suggests Apple did not meet projected iPhone sales and thus did not order the number of OLED panels from Samsung that it expected to need, requiring the Cupertino-based company to compensate Samsung. Apple in April reported revenue of $58.3 billion, up from $58 billion in the year-ago quarter, but the company declined to provide guidance for the third fiscal quarter of 2020 due to the instability caused by the ongoing health crisis.

Apple plans to announce earnings for the third fiscal quarter (second calendar quarter) of 2020 on Thursday, July 30, which will give a better picture of how ‌iPhone‌ and other product sales fared during the prolonged store closures.

Apple also made a $683 million payment to Samsung in July 2019 after missing OLED display purchase targets due to poor sales in China and other parts of the world in the 2018 holiday quarter. Apple addressed those issues with ‌iPhone‌ trade-in promotions, price cuts, and monthly payment options, which boosted sales until the coronavirus hit at the beginning of 2020.

Tag: Samsung

Top Rated Comments

testcard Avatar
18 months ago
A billion here, a billion there. Pretty soon you’re talking serious money.
Score: 25 Votes (Like | Disagree)
kyleh22 Avatar
18 months ago
there's no act of god clause in there?! insurance companies have been using that BS for years...
Score: 13 Votes (Like | Disagree)
Zen_Arcade Avatar
18 months ago
A contract at work.

I am surprised Apple didn’t try to negotiate (read “dictate”) downward with a conditional future offer.
Score: 12 Votes (Like | Disagree)
AppleShareholder Avatar
18 months ago
Unbelievable! Samsung is killing Apple's margins! Apple better do something quick and improve margins or shareholders will revolt! Go back to LCDs if they have to! I don't care. Just bring your display margins down!
Score: 10 Votes (Like | Disagree)
JPack Avatar
18 months ago
Maybe now some people will understand why Apple signed up LG and BOE for OLED.
Score: 10 Votes (Like | Disagree)
asdavis10 Avatar
18 months ago
No "act of God" clause?
Score: 10 Votes (Like | Disagree)

Related Stories

General black friday 20 sale feature 2

Best Black Friday Deals on Apple Watch, AirPods Pro, MacBook Pro, More

Wednesday November 24, 2021 8:06 am PST by
Black Friday 2021 has kicked off, and you can now get some of the year's best deals on numerous Apple products. In this article we're providing a quick summary of all the best sales we've seen so far this season. For more on the best sales happening this week, visit our Black Friday Roundup. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a...
iphone holiday

Best Black Friday iPhone Deals Still Available

Friday November 26, 2021 4:58 am PST by
Cellular carriers have always offered big savings on the newest iPhone models in holidays past, and Black Friday 2021 is no different. Right now we're tracking notable offers on the iPhone 13 and iPhone 13 Pro devices from AT&T, Verizon, and T-Mobile. For even more savings, keep an eye on older models like iPhone SE. Note: MacRumors is an affiliate partner with some of these vendors. When you...
airpods pro blue holiday 3

Black Friday: AirPods Pro With MagSafe Drop to $159 on Amazon

Tuesday November 23, 2021 9:12 am PST by
Amazon is now matching Walmart's price on the AirPods Pro with MagSafe, available for $159.00, down from $249.00. These are shipped and sold directly from Amazon, and although stock is low you can still get them in time for the holidays (mid December as of writing). Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a...
apple wallet drivers license feature

Apple Delays iOS 15 Feature for Adding Your Driver's License to Your iPhone Until Early 2022

Tuesday November 23, 2021 9:35 am PST by
Apple recently updated its website to indicate that an upcoming iOS 15 and watchOS 8 feature that will let you add your driver's license or state ID to your iPhone and Apple Watch in participating U.S. states has been delayed until early 2022. Apple previously said the feature would launch in late 2021. In September, Apple said Arizona and Georgia would be among the first states to introduce ...
airpods 3 blue holiday 2

Black Friday: AirPods 3 Hit Record Low Price of $149.99 ($29 Off)

Thursday November 25, 2021 6:10 am PST by
Amazon has introduced a new record low price on the AirPods 3, available for $149.99, down from $179.00. At $29 off, this sale price beats the one that we were tracking earlier this week by about $5 and it's only available on Amazon as of writing. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which ...
airpods pro pink holiday

Black Friday: AirPods Pro With MagSafe Hit Lowest Ever Price

Tuesday November 23, 2021 7:47 am PST by
Apple's AirPods Pro with the new MagSafe Charging Case is now available for its lowest ever price thanks to Black Friday sales. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running. The limited-time deal is available at both Amazon and Walmart, which are both...
apple watch cellular holiday

Best Black Friday Apple Watch Deals Still Available

Friday November 26, 2021 4:55 am PST by
The Apple Watch always makes a great gift around the holiday season, and for Black Friday 2021 we're tracking a few solid offers on numerous models of the Apple Watch. In this article, you'll find the best Black Friday sales on the new Apple Watch 7, but the best money-saving discounts will be found on older models like the Apple Watch Series 3 and SE. Note: MacRumors is an affiliate partner...
iPads black friday 20 sale feature

Best Black Friday iPad Deals Still Available

Friday November 26, 2021 4:48 am PST by
Although Black Friday sales began as early as October in 2021, the shopping holiday is now officially underway and we're highlighting the best sales for each of Apple's product lines. In this article, you'll find the best Black Friday sales on iPad Pro and iPad mini. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a...