Samsung and Apple Cut Component Orders as Smartphone Shipments Fall 20%

Key Facts

Samsung’s mobile division asked suppliers to cut component deliveries for the fourth quarter of 2026 by between 20% and 30% compared with previous plans, while Apple cut October orders for some parts for its iPhone 18 Pro and Pro Max by between 15% and 20%, according to the Korea Herald. The moves raise the prospect of weaker demand for advanced panels for display suppliers as handset component costs climb. The developments are particularly significant for Samsung Display because its sales are concentrated among two large customer groups widely believed to be Apple and Samsung Electronics. The company’s audited 2025 accounts show that the two groups together generated 18.66 trillion won, equivalent to 14.1 billion dollars and 62.8% of sales. The accounts put the first group’s share at 40.4% of annual revenue and the second’s at 22.4%.

Those figures mean that any cuts to handset or component purchases by the two groups could affect the volume of demand Samsung Display receives, although the report does not specify how much the announced cuts will affect screen orders in particular. According to the Korea Herald’s analysis, the potential impact could extend beyond shipment volumes to profitability, as lower factory utilisation raises the fixed cost per panel. A decline in demand for higher-margin screens could also weaken the sales mix, even if production of other panel types continues. The report said: "Weak factory utilisation will raise fixed costs per panel, while a decline in the number of high-margin screens will weaken the sales mix." The company’s exposure to these developments stands out given the large share of its revenue tied to the two customer groups disclosed in its audited accounts. But the accounts do not distinguish, in the data provided, between each group’s handset purchases and screen purchases.

The announced cuts come alongside rising costs for memory used in handsets, adding to manufacturers’ pressure to reduce device costs. Research firm TrendForce estimated that prices for LPDDR5X memory, used in smartphones, jumped by between 78% and 83% in the second quarter of 2026 compared with the first quarter. The report attributed the pressure to chipmakers directing production capacity towards server DRAM and high-bandwidth memory used in AI data centres. The Korea Herald said rising memory prices were prompting handset makers to press for discounts on OLED panels; the report did not say that Samsung Display had granted those discounts. Counterpoint sees the impact of higher memory costs as more severe for mid-range and entry-level phones, where the bill of materials is more cost-sensitive. That could steer OLED growth towards premium phones and foldable devices, while lower-priced segments face greater cost pressures.

Industry data point to broader weakness in the handset market: global shipments fell 20% year on year in the third quarter of 2026, to their lowest level for that quarter since 2012, according to Counterpoint Research. Samsung’s own shipments fell 3% year on year in the period, despite its market share rising to 23% and its retaining the top spot, according to the research firm’s data. In the display market, Counterpoint forecast a 2% decline in global OLED panel shipments in 2026 to 1.1 billion units, after 3% growth in 2025. The firm also cut its forecasts for OLED demand in phones and IT products in 2026 and 2027, saying weak demand is increasing oversupply and making panel pricing more difficult. These forecasts point to diverging trends within the OLED sector, as growth in certain applications does not necessarily offset a contraction in handset shipments or overall panel demand.

Counterpoint estimates point to differences in demand across devices: in April, it forecast OLED shipment growth of 13% for tablets and 33% for laptops in 2026 compared with 2025, despite expecting OLED phone shipments to fall 3% that year. For foldable displays, Omdia expects Samsung Display to account for 66% of global shipments in 2026, as the market grows 44% to 29 million units. The segment offers a potential path for demand growth at the company while the traditional handset market faces pricing and memory pressures. The Korea Herald reported that Apple’s foldable iPhone Duo, equipped exclusively with Samsung Display OLED panels, began selling on Friday, according to the report’s publication date of 26 October 2026. The exclusive supply gives the company a foothold in the product, but its commercial impact will depend on the expansion of the foldable handset market. In its second-quarter 2026 results, Samsung Display reported consolidated revenue of 7.5 trillion won and operating profit of 0.7 trillion won, and said earnings in small and medium-sized displays improved, supported by strong demand for advanced mobile OLED.

First-quarter results were weaker: Samsung Display reported revenue of 6.7 trillion won and operating profit of 0.4 trillion won, as earnings in small and medium-sized displays declined because of seasonality and higher memory prices, according to Samsung Electronics’ results presentation. The company plans to focus in the second half of 2026 on meeting demand for premium smartphones with low-power products and varied form factors, while seeking to increase revenue by starting mass production at its 8.6-generation IT OLED line. In its fourth-quarter 2025 results presentation, Samsung Display had forecast greater pricing pressure on displays due to rising memory costs, while seeking to maintain its position in the handset market through differentiated technologies. Samsung is scheduled to hold its third-quarter results call on 29 October 2026 at 10 a.m. Korea time, a near-term event that could provide an official update on component costs and the display business. In the market, Apple shares closed at 347.73 dollars on 23 October 2026, according to EL7 data; Investing.com reported on 9 October that the stock fell after a report of component order cuts, noting that Reuters had been unable to verify the report at the time.