Samsung intends to purchase flexible OLED panels from China Star Optoelectronics Technology (CSOT). The Chinese company’s display will now become a part of upcoming mid-range and budget devices, including Samsung Galaxy A57 and future Fan Edition models. According to industry market reports, the decision may help the company reduce manufacturing costs amid rising component prices.
The company has utilized its display production division since it began using OLED displays in its Samsung mobile devices. Through this method, Samsung has maintained high-quality standards and control over its supply chain operations. However, the South Korean giant will have to reconsider its strategy as production costs increase.
The rising cost of memory components is the biggest obstacle for smartphone manufacturers. RAM and storage chip prices have edged higher, making it difficult for companies to meet their value proposition. Samsung needs to cut costs on other components to accommodate this price surge.
Industry reports that OLED panels from CSOT can be about 20% cheaper than those produced by Samsung Display. The Chinese supplier has already received an order from Samsung for approximately 15 million panels.
The Samsung group has reportedly developed internal tension because of this decision. Samsung Display raised objections but failed to convince the stakeholders. The project is progressing despite the rumors surrounding it. Samsung aims to keep its smartphone production expenses low while selling products at competitive market rates.
Samsung delivered approximately 240 million smartphones during the previous year. The Galaxy A series and other mid-range and budget models made up over half of the total smartphones sold. Technology experts will closely monitor the performance and quality of the new displays against Samsung's original displays.
Smartphone manufacturers are forced to change their production methods to accommodate rising component prices. Samsung has turned to a Chinese supplier to control its production expenses. However, the actual assessment of these new panels will depend on their ability to fulfill the quality standards that users associate with Samsung smartphones.