Samsung Phone Parts Shortages and Problems with the Supply Chain
Posted by Michael Lindsay on
Within the world of mobile touchscreens, there is one big player when it comes to manufacturing for all major brands. Samsung owns approximately 95% of the market share in mobile screens. They even manufacture screens for Apple iPhones. With only one major manufacturer, shortages on phone parts, especially touchscreens are the new normal in this industry.
New OLED Screens for Mobile Devices
The new technology favoured in mobile touchscreens today is AMOLED (shortened to OLED). There are a few factors that have contributed to the OLED touchscreen technology being favoured over the previous LCD. The OLED display has a quicker response time and consumes less power. It allows for curved screens and fingerprint readers also only work on an OLED display.
The OLED displays also present problems for repairs and refurbished parts. OLED screens are delicate to work with. Any exposure to moisture or oxygen can damage or destroy them. They also suffer from long term burn-in. This is where, pixels can get permanently damaged and start to show ‘ghost’ images on the screen. Curved screens also make fix it yourself scenarios out of the question. These problems leave consumers at the mercy of the major manufacturer; Samsung to supply replacement parts as needed.
New Phone Releases Cause Samsung Parts Shortages
With a focus on new phones, Samsung simply doesn’t have the resources or factories to keep up with the demand for parts. With the release of every new phone, a major shortage for parts, especially OLED touchscreens often occurs. The Australian launch of the Samsung Galaxy S10e, S10 and S10 Plus on 8 March this year saw another bump in the supply chain. The launch of the Note 10 on 23 August also impacted it.
With limited factories and regular new phones being released, demand for OLED touchscreens becomes very high. Manufacturing resources become focussed on production of these new phones. Spare parts to fix older, broken phones are simply not a priority for Samsung. This also causes the prices for spare parts to rise as supply and demand becomes an issue.
Samsung S9 and S9 Plus Problems
Another issue that would have impacted an already shaky supply chain was issues with the Samsung S9 and S9 Plus. Released on 16th March 2018, the S9 and S9 Plus had problems with their displays from the start as reported by Forbes.
New owners were finding ‘dead zones’ on their screens. This is where certain areas would ignore any touch or lose their functionality when scrolling across or zooming in. This issue meant Samsung had to replace many brand new phones. This would have put more strain on their already overworked factories.
OLED Supply and the Trade War between Japan and Korea
Yet another global issue that has impacted the supply chain for Samsung parts recently is the trade war between Japan and Korea. On the 4th July this year Japan tightened its regulations on the supply of certain materials used to make smartphones.
This greatly affected the Korean company; Samsung. As reported by Japan Times, the trade war between Japan and Korea is due to disputes about compensation over wartime labor from decades ago. This dispute is making it harder for Samsung to access materials they need to manufacture smartphone chips. This includes materials for OLED screens.
LG no Match for Samsung OLED Supply
Samsung is the major supplier of OLED screens for smartphones but LG (a Japanese company) is trying to compete in their arena. A leader in TV screens, LG returned to making OLED phone displays in 2017.
Their V30, and Google’s Pixel 2 released in September and October 2017, had LG screens. The quality of the screen for these 2 phones was simply not up to scratch to compete with Samsung. To date it seems that LG is still not considered a genuine competitor to Samsung and OLED screen production.
Hard to Get Samsung Parts
With long lead times, shortages in out of stock phone parts can last a long time. When shortages of OLED screens and Samsung parts occur, they can last 3- 6 months due to the time it takes to get from the factory to the distributor. Due to some hazardous materials in phones and their parts (such as lithium batteries), they have to be transported delicately.
Freight by air is simply too expensive so phones and their parts are shipped by sea. This can take 6-7 weeks. Backorders are then filled first before parts or replacements become available to simply purchase.
Supply chain and stock shortages on phone parts is a complicated matter that mostly comes down to a lack of competition in the market. With Samsung having few reasons to make replacements affordable for phones along with its shareholders wanting people to keep buying new, it seems these problems will continue into the foreseeable future.