Samsung Display has terminated a contract to make LCD panels for Apple due to supply chain issues and financial strain, according to a news report published in The Korea Times on Monday.
The display maker is not able to supply Apple with panels at discount prices, and Samsung will stop supplying displays to Apple by next year, said the newspaper report, which cited a Samsung source. Apple's tight supply chain management structure has had a financial effect on Samsung Display, according to the report.
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Samsung was a key supplier of displays to Apple for its smartphones and tablets. But there appears to be a growing rift between the companies, which compete in those markets. The companies are locked in legal battles and a jury earlier this year awarded Apple $1.05 billion in damages in a patent infringement lawsuit against Samsung, although the South Korean firm has appealed the ruling.
Apple did not respond to a request for comment, while a spokesman for Samsung in Korea said the report is incorrect. Samsung's display business is separate from the division that makes its smartphones, he said.
The Korea Times article is "100 percent false," the Samsung spokesman said via email.
Other Apple display suppliers include Sharp and LG Electronics. The display has been a key innovation for the iconic iPads and iPhones. For example, the latest edition of the iPad displays images at a resolution of 2048-by-1536 pixels, which is the best of any tablet on the market. Apple is expected to announced a new iPad with a smaller screen later this week.
The screen of the iPhone 5, which started shipping last month, can display images at 1136-by-640 pixels. That is a bit less than smartphones such as Samsung's Galaxy S III, which has a 1280-by-720 pixel resolution screen.
But Apple and Samsung continue to work together on some fronts. Samsung is rumored to be manufacturing Apple's first home-designed A6 chip on the 32-nanometer process. Apple borrowed earlier processor designs from Samsung.
LG dominated the tablet panel market in 2011 with a 46 percent market share, followed by Samsung, which had a 35 percent market share, according to IHS iSuppli. The tablet panel shipments totaled 81.3 million in 2011 and will grow this year alongside tablet shipments, the research firm said.