We already know that behind Apple, Samsung is the biggest beneficiary from the iPhone X’s success. Samsung is the only company that makes OLED displays that meet Apple’s requirements, and the only supplier that can meet Apple’s needs.
Apple, meanwhile, is looking for other OLED display makers for the iPhone, in an effort to limit its reliance on Samsung. But that won’t happen in the near future, and a new report says Samsung will continue to receive the bulk of iPhone X display orders. And Samsung probably loves taking Apple’s money, even if the iPhone X threat means losing smartphone market share next year.
According to The Investor, Samsung will supply Apple between 180 million and 200 million flexible OLED screens for iPhones next year. That’s four times the amount of displays it sold Apple this year, and it adds up to between $19.8 billion and $22 billion in revenue.
Think about that for a second. That’s like selling anywhere from 21 million to 23 million Galaxy Note 8 units, the 64GB kind that retail for $929, without actually making and marketing those phones.
The report says that said Samsung’s smartphone share will drop next year, with estimated sales at roughly 4 million fewer smartphones in 2018 compared to 2017. But if it stands to make as much as $22 billion from iPhones alone, then Samsung will hardly be bothered. The Investor quotes IHS Market in saying that each iPhone X display, complete with the cover glass and touch sensor, costs Apple $110. And that cash is going to Samsung.
One of the reasons why Samsung will be able to ramp up OLED screen supply significantly next year is that it improved yield rates considerably at its A3 production plant. Yields went up to 80% in the second half of the year, compared to 60% earlier this year. Samsung is now closing in on 90% yield rates, which would allow it to manufacture 224 million 6-inch OLED panels per year.
Reports did say that Apple will sell two different iPhone X successors next year, and this report only seems to reinforce that idea, given that Apple’s demand for OLED display will increase significantly in 2018.