Apple is likely to reimburse Samsung Display over a shortfall in OLED panel orders owing to lower-than-expected demand for iPhone 12 mini models, according to The Korea Herald.
Samsung's small OLED shipments dropped globally in January by 9 percent month-on-month to 45 million units, according to market data gathered by Omdia, which pins the decline on sluggish iPhone 12 mini sales. Apple is likely to compensate Samsung for the missed OLED panel purchase targets as a result, an industry source told the Herald:
"It is uncertain whether Apple would pay a penalty to Samsung Display, but considering its contract history and sluggish sales of the iPhone 12 mini, it is likely that Apple will compensate Samsung," an industry official said on condition of anonymity.
Samsung is the sole supplier of the 5.4-inch panel used in the iPhone 12 mini, the smallest model of Apple's 5G-supporting iPhone 12 series.
If the prediction turns out to be accurate, it would be the third time that Apple has had to reimburse Samsung for missing OLED display targets after saying it would buy a certain number of the panels from the South Korean company.
Apple reportedly paid Samsung an estimated $683 million in 2019 and approximately $950 million in 2020 for similarly below-par OLED panel orders.
Samsung remains the world's leading smartphone display panel vendor, and has provided the overwhelming majority of OLED panels for Apple's iPhones over the last few years.
According to Omdia, global OLED panel shipments reached 53 million units in January, and Samsung Display accounted for 85 percent of them.
Despite a barrage of reports this year suggesting lackluster iPhone 12 mini sales, Apple is expected to retain its smallest 5.4-inch iPhone model size in its forthcoming iPhone 13 lineup.
