In the technology world, companies are very much dependent on each other as some companies are experts at producing certain components. It's no secret that Apple's iPhone X uses OLED panels that are manufactured by Samsung and the South Korean company's revenue depends highly on the iPhone X's sales.

© MensXP

A new report by Nikkei explains that Apple has now slashed the iPhone X production by half and has now left Samsung scrambling to find new customers for their OLED panels. Apple sells iPhones like hotcakes, however, the new iPhone X has been experiencing a slower rate of sale as compared to any other iPhone. Samsung ramped up the production to meet the demand for the iPhone X, however, will now face excess capacity as the Cupertino gift has reportedly cut the production of iPhone X.

Nikkei also reports that Samsung was hoping for other smartphone manufacturers to switch to OLED panels since Apple started including the more expensive panel in their latest device. Having said that, smartphone makers still stick to LCD panels as it is cheaper than OLED panels.

© Apple

Chinese manufacturers have also started giving stiff competition to Samsung with their own PLED panels and are rapidly expanding production capacity. This, in turn, puts extra pressure on Samsung for either reduce its pricing or find another smartphone maker that can afford to purchase excess OLED panels.

Nikkei reports:

“Samsung is increasingly selling OLED panels to outside clients,” said an official at an electronics trading company in Tokyo. Production of the iPhone X, whose sales have been sluggish, is expected to drop by half in the first three months of this year from the initial estimate of over 40 million units.

Having ramped up production capacity to meet the demand for the latest iPhone, the first model to incorporate the panels, Samsung is now saddled with excess production capacity.”

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Supply of OLED panels is expected to grow from other sources and LG is also ramping up its production of OLED panels. LG Display is expected to launch a new production line along with other companies such as China's Tianma Microelectronics and BOE Technology Group. Nikkei goes further to say “Overall production capacity is expected to double by 2020 compared to the 2017 level. Samsung's near dominance in the market for OLED smartphone panels -- over 95% -- will likely be lost.

Source: Nikkei