Samsung is halting purchases of display panels, according to a report from DSCC.
DSCC, a display market research group, posted the report yesterday, indicating that Samsung has slammed the brakes on screens in both the phone and TV markets. The report was penned by DSCC analyst Bob O’Brien.
“Samsung has notified all business groups to suspend purchases and control their inventory status. Samsung has informed flat panel display makers in smartphone and TV markets that panel purchases will be halted. Samsung is the world’s largest supplier of both smartphones and TVs,” the report reads.
The news comes after Nikkei Asia reported that Samsung was ceasing all procurement orders. The company also supposedly asked suppliers to delay or reduce shipments of existing orders.
Sources told Nikkei Asia that growing inventories and international inflation concerns were part of the order reductions.
“Our sources in Asia have confirmed that Samsung has stopped issuing new purchase orders for panels and has cancelled current orders as well. Samsung has informed major flat panel vendors including Chinese LCD makers BOE, HKC and SIO,” added DSCC.
“Samsung’s action is the most recent and most dramatic of a larger picture of oversupply and excess capacity in the LCD industry. While the surge in demand early in the pandemic caused a shortage which lasted until mid-2021, price increases led LCD makers to increase supply while the demand peaked and started to decline. The result has been a growing pile of inventory.”
Samsung is one of the biggest suppliers of TV and phone displays, servicing other companies with its stock such as Apple (Apple purchased most displays for OLED iPhones from Samsung). This could change in the future.
DSCC predicts that this display halt and excess inventory could lead to companies trying to sell off excess inventory at cash costs (or lower). Additionally, the research group says that production exceeded demand by at least 9 per cent in the last 12 months. There was a surge of demand during the height of the pandemic, but that slowed down after everyone got well acquainted with their home office.
We’ve reached out to Samsung for comment.
You can read the DSCC report here.