Samsung Display Cuts Ties with Russian Metal Suppliers Amid Sanction Concerns

In 2024, Samsung Display discreetly ended its procurement relationships with Russian suppliers of gold, tungsten, and tantalum, as reported by the Kommersant business daily, referencing newly released corporate filings.

This action by the South Korean company, which specializes in manufacturing displays for smartphones, televisions, and laptops, underscores the increasing global caution among technology firms regarding the potential risks of secondary sanctions linked to the ongoing conflict in Ukraine.

Samsung Display’s previous suppliers included several of Russia’s major metal processing companies, such as the Novosibirsk Refinery, UralElectroMed, Krastsvetmet, and the Prioksky Non-Ferrous Metals Plant, which supplied gold for microchip bonding wires.

The Solikamsk Magnesium Plant, Hydrometallurg, and other entities provided tantalum and tungsten, both of which are vital for chip barriers and internal wiring.

These metals are crucial in the production of modern electronics, with tantalum serving as a barrier between silicon and copper in semiconductors, tungsten being essential for high-density interconnects, and gold playing a significant role in chip packaging.

Samsung Display, a part of the Samsung conglomerate, produces high-quality screens utilized in its own devices as well as in products from other leading electronics manufacturers, including Apple.

Apple was one of the first major tech companies to cease purchasing Russian raw materials following the Ukraine invasion in 2022 and now relies heavily on Samsung and LG for the advanced OLED displays featured in its iPhones.

According to MacRumors, a U.S.-based technology news source, both South Korean companies began mass production of displays for the iPhone 16 Pro in May.

Industry analysts suggest that Samsung Display’s choice to terminate its sourcing from Russia is likely driven by concerns over secondary sanctions that might affect companies dealing with Russian firms, even indirectly.

While some experts in the industry think that Samsung may still be sourcing Russian metals through intermediaries, others claim that the departure seems to be definitive.

“This could present both logistical challenges and strategic advantages,” Oleg Izumrudov, director of a consortium of Russian data storage developers, told Kommersant. “If the company shifts to longer international supply chains, it might increase device costs by 2-5%. However, if components are sourced directly from manufacturers in China, costs could potentially decrease by the same percentage.”

An unnamed source within the electronics manufacturing sector expressed skepticism about the intermediary theory.

“For Russia,” the source shared with Kommersant, “this implies that South Korean companies do not intend to reenter the Russian market in the near future. They are interested in selling finished products, but not in sustaining close industrial partnerships.”