Samsung Quits as Apple LCD Panel Supplier

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Citing a "stiffer supply-chain management structure," Samsung Electronics said today that it will end its contract with Apple Inc. (NASDAQ: AAPL) and stop supplying the U.S. company with LCD panels. Samsung shipped more than 15 million LCD panels to Apple in the first six months of 2012, according to a report in the Korea Times, but only 3 million panels in the third quarter. Fourth-quarter shipments are expected to fall to 1.5 million units.

A Samsung official told the newspaper, "We are unable to supply our flat-screens to Apple with huge price discounts." That is presumably the "stiffer supply-chain management structure" problem the company cited.

This appears to be the latest fallout from the ongoing legal battles between Apple and Samsung over intellectual property rights. For a long time, it looked like Samsung would continue as a supplier for iPhone, iPad, and other Apple products, but last week Samsung revealed that it is taking a diminished role in Apple's smartphone chip designs as well.

Samsung believes that LCD panel sales to Amazon.com Inc. (NASDAQ: AMZN) and to the company's own smartphone group will fill the gap left by Apple. But which gap - the 7.5 million units per quarter gap or the 3 million or less units per quarter gap?

Paul Ausick

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