Samsung is considering outsourcing OLED production to a competitor.

Samsung is considering BOE as a supplier of OLED panels for the Galaxy S27. Photo: Reuters .

According to leaked information from Ice Universe, BOE, a Chinese technology manufacturer, is attempting to break into Samsung's Galaxy S27 OLED display supply chain. The company has submitted a substantial offer, which is currently under consideration.

Ice Universe reports that BOE is offering to supply OLED panels for the standard Galaxy S27 at a price approximately $5 lower per panel than Samsung Display. Historically, the supply for the Galaxy S flagship series has relied almost entirely on its in-house manufacturing partner, Samsung Display, leveraging its vertical supply chain advantage of both manufacturing phones and producing its own high-end OLED displays.

However, the Chinese smartphone market is slowing down, especially in the Android segment, leading to BOE having excess OLED production capacity. With factories producing more than they actually need, the company is forced to use lower prices to win new orders.

The $5 per panel saving might seem small, but on the scale of tens of millions of Galaxy S27 units, it would amount to a huge saving. For example, if Samsung sells 30 million units, the difference could be around $150 million .

The South Korean smartphone company has submitted a request for a quote to BOE and is currently evaluating prototypes. This means BOE is being seriously considered as a panel supplier for next year's Galaxy S27 series.

Previously, Samsung was known for its rigorous testing process with OLED suppliers for its flagships. If the Galaxy uses a BOE screen, it indicates that Samsung prioritizes cost optimization over retaining a significant portion for Samsung Display.

Meanwhile, BOE is employing a Chinese-style strategy, expanding market share through extremely competitive pricing first, and then maximizing profits later. This is how many Chinese companies have previously operated in the battery, LCD panel, and solar panel sectors.

However, the Chinese manufacturer has also encountered OLED quality issues on some large orders with Apple. Earlier this year, BOE again had a low percentage of products failing to meet standards at its Mianyang plant, forcing Apple to switch millions of OLED orders to Samsung Display.

Regarding the domestic market, BOE is also facing pressure on OLED displays as Chinese smartphone manufacturers are cutting production. Therefore, they are now using price as a weapon to compete for orders from Samsung.

Samsung Display, the display manufacturing subsidiary of Samsung Group, has repeatedly clashed with BOE in various legal bodies around the globe. In 2024, the company filed a lawsuit against its rival for allegedly attempting to illegally recruit its personnel and colluding with supply chain partners to steal confidential information.

According to Ice Universe, if BOE successfully gains access, Samsung's internal supply chain will suffer a major shock. Samsung Display will face direct price pressure as the cost of producing display panels for the Galaxy S25 will be significantly cheaper.

Ice Universe is a well-known tech leak source on X, specializing in information about Android smartphones from brands like Samsung and Xiaomi, as well as the OLED display supply chain. His account has been active since around 2017 and is followed by a significant number of Android users. He is considered highly accurate, particularly in the hardware sector of Samsung.

Source: https://znews.vn/samsung-can-nhac-chuyen-san-xuat-oled-cho-doi-thu-post1653589.html