Samsung Display is Bullying Suppliers to Drop Prices by 30% in Order for them to return to Profitability in Q4
It's being reported today that Samsung Display is demanding supply chains including backlighting makers to reduce pricing for components by as much as 30% during the fourth quarter of 2014 as the company aims to drop overall pricing for small- to medium-size applications. Supply chains are now seeing increased pressure to report reduced pricing and Samsung Display is also reportedly considering adjusting its supply chain structure by bringing in new makers to keep overall costs down.
With profits plunging by 60% last quarter due in part to the success of Apple's iPhones, Samsung is now scrambling in high gear to turn things around. Samsung's new strategy is to aggressively cut panel pricing in order to spur growth in its small- to medium-size panel segment as well as to provide Samsung Electronics with lower-priced solutions.
Samsung Electronics has seen its smartphone market share drop and is adjusting its strategy going into 2015, which includes providing price competitive handsets for the smartphone segment.
The move comes following news that stated Samsung Display is also slashing pricing for the OLED technology in order to expand its customer base and make the technology more prevalent in the market.
Such efforts have attracted new customers including Motorola Mobility and Oppo in addition to Dell and Lenovo who are all developing Samsung Display OLED technology either in smartphones or notebooks, said industry sources, adding that Samsung has been able to keep yields higher.