Apple pays Samsung an estimated $ 950 million for the lack of purchase targets for the OLED panel

Apple in the second quarter of 2020 paid Samsung approximately $ 950 million for failing to meet the OLED panel purchase targets set out in the agreements between the two companies, according to analysts at Display Supply Chain Consultants.

Last week, Samsung shared a guide to operating income and earnings 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, as Apple purchased fewer OLED panels than expected 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 on wsj.com, but did not disclose the amount. Last week, theelec.net reported that the Samsung Display is believed to have received 900 billion KRW from Apple for buying fewer OLED panels than required, but DSCC sources suggest the payment is closer to $ 950 million.

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

The payment suggests that Apple failed to meet projected iPhone sales, and therefore failed to order the number of Samsung OLED panels it expected to need, requiring the Cupertino-based company to compensate Samsung. Apple reported revenue of $ 58.3 billion in April, compared to $ 58 billion in the prior-year quarter, but the company declined to provide guidance for the fiscal third quarter of 2020 due to instability caused by the crisis in ongoing health.

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

Apple also made a $ 683 million payment to Samsung in July 2019 after missing its OLED display purchase targets due to low sales in China and other parts of the world in the 2018 holiday quarter. Apple addressed those issues with promocionesiPhone‌ exchange promotions, price cuts, and monthly payment options, which fueled sales until the coronavirus arrived in early 2020.