Samsung will begin supplying Apple with organic light-emitting diode (OLED) panels for the latter's iPhone with an estimated volume of 100 million units per year, a South Korean report says.
According to Hankyung, Samsung Display, the display panel-making affiliate of Samsung Electronics, has signed a deal with Apple to supply around 100 million 5-inch OLED panels for the latter's iPhone 7S, starting next year.
The deal is worth 3 trillion won ($2.6 billion), and Samsung is planning to expand its A3 factory line to meet the Cupertino-based company's demand, the report says.
The South Korean tech giant is currently expanding the line's capacity from 15,000 glass sheets per month to 30,000. The added demand for Apple will see the line expanded further with a total investment reaching possibly 10 trillion won ($8.7 billion), it said.
Samsung Display is the main supplier of AMOLED panels for its parent firm Samsung Electronics' premium Galaxy smartphones.
It supplied Liquid Crystal Display (LCD) for Apple until 2009 but the deal was halted following the two conglomerates' patent dispute that is still on-going.
Since then animosity has cooled down and the two are increasing their supply deal, with Samsung supplying memory chips for iPhones. The South Korean tech giant, the world's largest memory chip vendor, is expanding its semiconductor line for Apple as well, sources familiar with the matter says, in a deal also worth billions of dollars.
If Apple indeed uses OLED for its next-generation iPhones, it will be the first as it has only been using LCD until now.
Hankyung said Samsung is also requesting a guarantee of three years purchase due to the large commitment it is making but Apple is reportedly refusing.
Given iPhone's huge volume, Apple will likely wish to be flexible about which partners it purchases from depending on market situation.
Apple buys the majority of its components -- displays, chips, and camera modules -- for its products from South Korea, Taiwan, and Japan and assembles them in Greater China.
LG Display is also in talks with Apple to supply OLED panels and is expanding its factory line with plans to start production in the first half of next year.
Samsung declined to comment on the matter.