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Korean display makers poised to suffer from US ban on Chinese app WeChat

Sep 14, 2020 (Gmt+09:00)

Korea’s two largest display panel makers – Samsung Display Co. and LG Display Co. – are widely expected to suffer from the US ban on Chinese messaging app WeChat when President Trump’s executive order goes into effect on Sept. 20.

It’s still unclear whether the ban applies to the WeChat app only in the US or will result in the removal of the app from iPhones across the globe, including in China, but industry officials said Samsung and LG will be among those display makers hit hard by the US government decision.

For Apple Inc.’s soon-to-be-launched iPhone 12 models, Samsung is known to be supplying up to 52 million units of OLED display panels to the US company, which will also receive as many as 20 million such panels from LG. If sales of iPhone 12 in China or globally fall in the wake of the US ban, the Korean panel makers, which run production lines dedicated to Apple’s iPhones, would also be forced to cut their output, according to the industry officials.

“Even if Apple offers some compensation for the likely losses, the amount would be minimal,” said an industry source.

The messenger app WeChat and short-video app TikTok are seen near China and U.S. flags.
Messenger app WeChat and short-video app TikTok above Chinese and US flags

President Trump announced Aug. 6 that WeChat, like the video app TikTok, is a Chinese-owned entity that threatens US national security. A WeChat ban in the US has the potential to cause a minor drop in iPhone sales, but a ban in China would be devastating for Apple as many iPhone users feel their devices would be useless without the Chinese-language messaging app.

In a Weibo survey conducted last month, more than 90% of the 800,000 respondents said they would switch to an Android smartphone over an iPhone rather than give up WeChat. WeChat has more than 1.2 billion monthly active users globally, many of them in China.

Industry estimates have it that Apple is selling some 30 million iPhones a year in China, accounting for about 15% of its global iPhone sales.

In a recent report, Apple analyst Ming-Chi Kuo said that global iPhone shipments could decline by 25-30% if Apple is forced to remove WeChat from its Apples Stores worldwide.

By Jeong-Soo Hwang

In-Soo Nam edited this article

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