Samsung Display will terminate its contract to supply LCD panels for Apple due to financial pressures caused by Apple's tight supply chain management, according to a news report published in The Korea Times on Monday.
Samsung can't provide Apple with displays at a steep discount and will stop supplying the company with LCDs next year, said the newspaper report, which cited an unnamed Samsung source.
Samsung has been a key supplier of displays to Apple for its smartphones and tablets, but legal battles between the companies have opened a rift between them, the newspaper said. In one of the disputes, a California jury awarded Apple US$1.05 billion in damages this year for patent infringement, though the South Korean firm has appealed.
Apple did not respond to a request for comment, while a spokesman for Samsung in Korea said the report is incorrect. Samsung's display business is separate from the division that makes its smartphones, he said.
The Korea Times article is "100 percent false," the Samsung spokesman said via email.
Other Apple display suppliers include Sharp and LG Electronics. The display has been a key innovation for the iconic iPads and iPhones. For example, the latest edition of the iPad displays images at a resolution of 2048 by 1536 pixels, which is the best of any tablet on the market. Apple is expected to announced a new iPad with a smaller screen later this week.
The screen of the iPhone 5, which started shipping last month, can display images at 1136 by 640 pixels. That is a bit less than smartphones such as Samsung's Galaxy S III, which has a 1280-by-720-pixel-resolution screen.
But Apple and Samsung continue to work together on some fronts. Samsung is rumored to be manufacturing Apple's first home-designed A6 chip on the 32-nanometer process. Apple borrowed earlier processor designs from Samsung.
LG dominated the tablet panel market in 2011 with a 46 percent market share, followed by Samsung, which had a 35 percent market share, according to IHS iSuppli. The tablet panel shipments totaled 81.3 million in 2011 and will grow this year alongside tablet shipments, the research firm said.