Samsung Electronics posted record first-quarter profits on Thursday, but warned about a slowdown in its display panel segment.
That could be bad news for Apple’s iPhone X.
“Generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business amid rising competition in the high-end segment,” Samsung said in a statement.
The display panel business makes organic light-emitting diode, or OLED, screens for both its own smartphones but also for the iPhone X.
Samsung said in its first-quarter earnings announcement that the display panel segment profits were “affected by the slow demand for flexible OLED panels.” For the second-quarter, the company predicted the same weakness to persist and said it would do cost-cutting and improve efficiency.
The company’s predictions came after key iPhone supplier Taiwan Semiconductor Manufacturing (TSMC) warned about slower growth in smartphone chip sales. TSMC said its revenue forecast range for the second quarter is $7.8 billion to $7.9 billion, lower than Wall Street estimate of $8.8 billion. The company blamed “weak demand” in the mobile sector for the forecast.
Another key Apple supplier gave dramatically lower June quarter guidance. Austria-based AMS, which provides optical sensors used in the iPhone X, said it expects sales for its second quarter to be in the range of $220 million to $250 million, down nearly 50 percent from its first quarter.
Wall Street blamed poor iPhone X demand for both TSMC and AMS’ weak guidance.
One analyst predicted that Apple could be poised to kill off its iPhone X line this year.