Samsung has backup plan to avoid Galaxy phones’ OLED display chip shortage

Samsung is quietly lining up a backup plan for one of the most critical parts inside its OLED Galaxy phones: the display driver IC. And the reason is a supply squeeze that has already cost it production volume on a flagship.

Samsung’s backup plan to avoid OLED DDI shortage

According to ZDNet, Samsung is now weighing a dual-sourcing OLED display chip arrangement that would bring GlobalFoundries into the mix alongside UMC.

A DDI is the chip that tells a screen’s pixels what to do, using thin-film transistors to control each one. Right now, OLED Galaxy DDIs are designed in-house by Samsung’s System LSI division and built exclusively by Taiwan’s UMC.

The memory supercycle that kicked off in the second half of last year has pushed demand for legacy-node chips past available supply, and UMC has struggled to keep pace. Samsung felt it directly with the Galaxy Z Fold 8.

After the July launch, demand beat expectations, and Samsung asked UMC for a “super hot run,” an expedited production slot, but UMC said no.

Its 22nm line, which makes the Fold 8’s DDI, was already maxed out, and accommodating Samsung would have meant reshuffling schedules for other customers.

The result was a 10 percent cut to the Galaxy Z Fold 8 component production last month, with that volume pushed into the October forecast. This looks to be a small trim on paper, but a clear sign of how tight things are.

GlobalFoundries would reportedly handle DDI production on its 22nm or 28nm processes, with capable fabs in places like Singapore and Germany.

The first GlobalFoundries-made chips could appear as early as late next year, and likely not in anything high-end. Expect them in select mid-to-low-tier Galaxy A models with OLED panels. GF has reportedly shown strong interest in the work.

My read: if the A-series pilot goes smoothly, I would not be shocked to see GlobalFoundries’ share grow into the premium phones later. That is just speculation, and a 2nd supplier does not fix a market where legacy capacity is scarce for everyone.