Suppliers suffering from Galaxy Fold’s delayed launch

Suppliers for foldable phones are suffering on the delayed launch of the next generation handsets that had promised hefty profit margins, industry sources said on June 11.

To name just a few, Kolon Industries, Innox Advanced Materials, BH Co. and KHVATEC are all on the edge of their seats, waiting for a sign from Samsung or Huawei that they will go ahead to launch their foldable smartphones.

Samsung Electronics originally planned to launch the Galaxy Fold in North America on April 26, but it decided to postpone just days ahead of the release after the handsets’ durability was called into question. The world’s largest smartphone maker has yet to set the next release date.

It’s also uncertain whether Huawei – hard-hit by latest US sanctions – can ship its foldable phone Mate X in June or July as scheduled. The same goes for Motorola’s Razr.

“The situation doesn’t look too good for suppliers, and with the US-China trade war going on, it’s not certain when these phones can be released.”

Now, suppliers are seeing some of their best-laid plans backfire.

Kolon Industries, which was the first to secure mass production equipment for smartphone PI films and also the only manufacturer with such production capacity, has not forced to virtually shut down the lines.

“Kolon was hoping to achieve market dominance with mass production facilities, but it’s probably now quite nervous at the lack of progress,” said one industry watcher on the condition of anonymity.

Ever since losing out to Japan’s Sumitomo in supplying transparent PI films for Samsung’s Galaxy Fold, Kolon has been hoping to get back in the game.

Innox and KHVATEC, which supplied base film and hinges, respectively, for the Galaxy Fold, have less in stake because their shipment was modest in volume. But they are still missing out, market watchers noted, since they are not benefiting from what could have been pretty decent margins.

Suppliers also face the risk of having to compete against newcomers for the next Galaxy Fold, unlike now since they are each supplying exclusively.
In the case of BH Co., which supplies rigid flexible printed circuit board (RFPCB) for OLED panels, it had expected its profit to double on the bigger screens. Industry watchers say that BH could be hit by a double whammy if China decides to strike back on American firms; BH Co. supplies RFPCB to Apple’s iPhones.

Some suppliers declined to comment, saying that it’s up to the client to decide when they will start rolling out their goods. Others such as SKC and SK Innovation plan to complete their own PI film mass production lines by Q3 despite the setbacks.

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