Samsung Will Terminate Apple’s LCD Distribution Contract

Samsung is close to terminating its liquid crystal display panels contract with Apple, Inc.

According to Samsung officials, Apple’s strict supply chain requirements are the primary factor for deciding to end the deal.

Analysts believe that Samsung has already cut down on the number of displays it is shipping to Apple. The company’s entire operational agreement with Apple is expected to end before 2013.

Apple partially uses the Samsung manufactured displays to assist in the production of its iOS based smartphones and tablet devices.

Samsung reportedly shipped less than three million displays to Apple in Q3 2012. Samsung display sales to Apple are expected to slip below 1.5 million units in Q4 2012. It has also been reported that Samsung displays are not featured on the upcoming Apple iPad mini tablet.

To replace Samsung components, Apple is believed to be in negotiations with LG and several other industry leaders.

The reversal of Samsung’s decision comes after the first six months of 2012 saw Samsung act as Apple’s number one display provider with 15 million displays shipped. In comparison, LG and Sharp provided Apple with 12.5 million and 2.8 million displays respectively.

Samsung is rumored to be in talks with Amazon, a move that would allow the tech firm to produce displays for the Amazon Kindle Fire line of Android-powered tablets.

Samsung’s biggest increase in display orders however has come from the company itself. As the Samsung Galaxy S III and Galaxy Tab devices continue to increase in popularity so to does Samsung’s own need for increased display production.