Korean media: Samsung has ordered 15 million OLED mobile phone panels from TCL Huaxing

On March 17, according to Korean media The Elec, Samsung Electronics’ MX division has ordered approximately 15 million OLED panels from TCL China Star Optoelectronics (CSOT) for use in mid-range mobile phones such as Galaxy A57 and FE (Fan Edition). Production of these two models is expected to begin next month. The MX Business Department believes that TCL CSOT is superior in price competitiveness, so it made this decision.

Previously, except for some ultra-low-price smartphones, all A-series OLED panels have been supplied by Samsung Display. The reason for maintaining a high proportion of panels from subsidiaries in mid- to low-end models is to ensure stable quality and maintain an internal supply chain.

However, as the recent rise in memory prices has increased the burden of manufacturing costs, Samsung Electronics' MX business unit is seeking to diversify its supply chain to reduce the unit price of display panels.

Price is the most direct reason why Samsung Electronics purchases panels from TCL CSOT. Industry insiders estimate that TCL CSOT's OLED panel supply price is at least 20% cheaper than Samsung Display. An industry insider said: "The price of memory cannot be cut, but there are other alternatives for display screens, so the price should be cut as low as possible." Some people also believe that choosing other panel companies to reduce costs is also to avoid over-reliance on related suppliers.

According to reports, this incident led to a fierce conflict between Samsung Electronics’ MX Division and Samsung Display. Samsung Display even sought help from group organizations in an attempt to reverse the decision, but failed.

At the same time, surrounding semiconductor partners have also been affected. Because mid-range smartphones such as the Galaxy A57 equipped with TCL Huaxing panels have display driver chips or power management chips produced in mainland China or Taiwan.

Samsung Electronics shipped approximately 240 million smartphones last year. Among them, mid-range models, such as the A series, are the company's flagship product line and account for more than half of sales. By successfully entering this market, TCL CSOT has acquired the world’s second largest customer, Samsung Electronics.

In contrast, Samsung Display may face greater pressure on profitability this year. In addition to reduced orders for the A5 series, soaring memory prices have also prompted terminal manufacturers such as Samsung Electronics to cut low-end product lines, thus affecting overall panel procurement demand.