Apple paid Samsung almost $1 billion penalty, here's why

Apple's penalty amount to Samsung is said to have helped the company profit from its display business.

Samsung is Apple's biggest OLED supplier.

Apple has reportedly paid Samsung a penalty amount of almost $1 billion for failing to purchase OLED displays as required. Samsung Display is Apple's biggest OLED supplier for its iPhones.

It was earlier reported that Apple paid Samsung around $745 million for not meeting the OLED display purchase requirement. But a new report from Display Supply Chain says that the penalty was actually around $950 million. This payment has also reportedly boosted Samsung's Q2 revenue with the company estimated to have received a “one-time gain related to its display business”.

Samsung didn't disclose the amount but it's expected to be Apple's penalty closing in to $1 billion. This payment also helped overturn Samsung Display's loss to a profit.

It's not the first time something like this happened. Last year too Apple faced a penalty for not buying OLED panels from Samsung as decided. Apple reportedly paid Samsung around $684 million as penalty last year. Weak demand and sales due to Covid-19 is expected to have resulted in Apple not meeting the OLED panel requirement.

Apple is also expected to shift from Samsung Display to China's BOE Tech as its biggest OLED supplier for the iPhone 12 series. This year Apple is expected to launch four iPhone 12 models with 5G support. All four 5G iPhones will also reportedly feature OLED displays.