Samsung Electro-Mechanics said on Friday that it was ending its rigid flexible printed circuit board (RFPCB) business. It has been manufacturing the boards at its factory in Vietnam.
RFPCB is used to connect the OLED panel with the main board. It has flexible and rigid characteristics, which makes product design easier and the sending of electric signals faster.
Samsung Electro-Mechanics’ main customers for the board has been Apple and Samsung Electronics.
Apple accounted for around 300 billion won of its sales per year from the business, while Chinese customers and Samsung Electronics accounted for 100 billion won per year.
However, Samsung Electro-Mechanics has been seeing a loss of around 50 billion won per year from the business.
The company said that sales will be down from exiting the business but it expected overall profitability to improve.
It remains to be seen who will take over the orders from Apple.
BH and Youngpoong Electronics, which already supplies RFPCB to Cupertino, will likely take over the order.
For the iPhone 13 series, BH accounted for mid-50% of the board supply, while Samsung Electro-Mechanics accounted for 30% and Youngpoong Electronics mid-10%.
Up to 2020, Samsung Electro-Mechanics had supplied a similar amount to Apple as BH but it was reduced as the Samsung Electro-Mechanics decided to shrink the business this year.
Youngpoong Electronics’ affiliate Interflex could also reenter Apple’s RFPCB supply chain.
Interflex had supplied its RFPCBs to Apple for the iPhone X’s OLED panel and touch screen panel in 2017, but if caused a screen malfunction, resulting in the company being removed from the supply chain.
Samsung Electro-Mechanics CEO Kye Hyun-kyung, when he became CEO last year, had ordered the company to review exiting its RFPCB and wireless communication module businesses.
RFPCB business’ profitability has been hampered by fixed costs; however, Apple had requested that Samsung Electro-Mechanics supply its boards up to this year.