Update: A spokesman for Samsung Display has come forward to deny reports that the company is pulling the plug on its LCD shipments to Apple. "Because of the patent lawsuit, the industry is guessing we tried to cut the supply. We didn’t do that. We will continue to supply panels for any customer," he added. That said, it's clear Apple isn't comfortable relying on its main rival for components and has been looking to reduce its dependence on them for a while. The denial from Samsung did not go so far as to affirm that the company would indeed continue supplying LCD panels to Apple next year and beyond. Original story is below.
Samsung will stop supplying displays for Apple’s iDevices as early as next year, according to a “senior Samsung source” speaking to the The Korea Times. The move would come as the two companies continue their legal battle around the globe, although the decision to cut ties is reportedly based on other reasons as well. Namely, Apple is demanding prices that Samsung just isn’t willing to offer anymore.
According to the paper, the price per pixel for Samsung displays more than halved from the iPad 2 ($0.000063) to the new iPad ($0.00003). The Cupertino-based company leveraged its influence to source components from Samsung’s rivals at lower prices, thus forcing the latter to heavily discount its screens as well.
Apple has been trying to reduce its reliance on Samsung’s component supplier arm for a while, so while the change will represent a shakeup in the company’s supply change, both firms were likely preparing for this moment. Just earlier this year, Samsung was the only company supplying retina displays for the third-generation iPad, but since then Apple has increasingly turned to LG and Sharp for supplies.
Beginning in 2013 Samsung will stop shipping LCDs to Apple entirely, offsetting the loss by selling more displays to its own consumer electronics division, as well as Amazon for its Kindle devices. It’s unlikely Samsung will be providing displays for the iPad mini, expected to be announced tomorrow.
Last week the Korea Times also reported that Apple plans to drop Samsung as a provider for mobile chips. The new A6 processor used in the iPhone 5 is already designed entirely in-house, with Samsung limited to production only. Rumors suggest Apple might take their chip business to TSMC going forward.