Samsung Electronics is to slash production at its OLED panel plant in response to Apple's decision to reduce output of the iPhone X following weak demand, according to Nikkei.
According to the report, Samsung Display now plans to manufacture organic light-emitting diode panels for 20 million or fewer iPhones at the South Chungcheong site in the January-March quarter. The initial goal was to supply panels for 45 million to 50 million iPhones.
The company has yet to decide its production target for the April-June period, but a further cutback may be in store.
The report also said that the new target will reduce production at the plant to around 60% of the original plan. When it comes to the facility dedicated to making panels for Apple, the rate will fall to 50% or lower.
By securing more orders from Chinese and other customers the Samsung group unit is looking to offset the impact.
Nikkei said that Samsung's display business is expected to see a year-on-year profit decline for the first half of 2018. Anticipating a demand surge from Apple, the company made a 13.5 trillion won ($12.6 billion) capital investment last year, resulting in a 1.5 trillion won increase in depreciation costs in 2018.