Samsung Raises AMOLED Prices to Cover Note 7 Losses

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Samsung Electronics scrapped its flagship Galaxy Note 7 after a series of explosion incidents caused by faulty batteries that has dented its brand reputation. Industry insiders estimate the Korean electronic conglemorate might raise DRAM, AMOLED and other component prices to compensate losses incurred from the Note 7 incidents.

TrendForce estimates Apple and Chinese smartphone manufacturers will be expanding its production capacity in fourth quarter of 2016, to fill in smartphone shortages caused by Samsung’s terminated Note 7 production. It is estimated DRAM, NAND, Flash, AMOLED and other core smartphone components will be in short supply, which will push up price quotes.

TrendForce estimates Samsung’s halted Note 7 production will cause smartphone shipment volumes to plunge by 6 million to reach 310 million, competitors such as Apple’s shipment volume would rise from 205 million to 208 million, while Huawei’s shipment volume is projected to rise from 144 million to 147 million.

Despite sliding Samsung smartphone shipment volume, there has been little impact on the general smartphone shipment volume. Contrary, Samsung has been raising DRAM, NAND, Flash and AMOLED display prices, reported Business Korea.

According to the report Samsung Display has a near monopoly in the AMOLED sector with more than 95% market share, and large memory chip orders for smartphones. Samsung just needs to raise core component prices to make up for losses from terminating Note 7 productions.

DRAMeXchange estimates during third quarter of 2016 DRAM prices soared, which spurred SK Hynix’s price climb. DRAMeXchange estimates by the end of third quarter DRAM prices will increase 9%, and by fourth quarter prices are expected to jump 30%. Morgan Stanley analyst Shawn Kim estimated SK Hynix share prices might inch soar 20% from these positive market developments.

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