Samsung Display will terminate its contract to supply LCD panels for Apple due to financial pressures caused by Apple's tight supply chain management, according to a report in The Korea Times yesterday.

Samsung can't provide Apple with displays at a steep discount and will stop supplying the company with LCDs next year, said the newspaper report, which cited an unnamed Samsung source.

Samsung has been a key supplier of displays to Apple for its smartphones and tablets, but legal battles between the companies have opened a rift between them, the newspaper said. In one of the disputes, a California jury awarded Apple $1.05 billion in damages this year for patent infringement, though the South Korean firm has appealed.

But a spokesman for Samsung in Korea said the report is incorrect. Samsung's display business is separate from the division that makes its smartphones, he said.

The Korea Times article is "100% false," the Samsung spokesman said.

Other Apple display suppliers include Sharp and LG Electronics. The display has been a key innovation for the iconic iPads and iPhones. For example, the latest edition of the iPad displays images at a resolution of 2048 by 1536 pixels, which is the best of any tablet on the market. Apple is expected to announce a new iPad with a smaller screen later this week.

The screen of the iPhone 5, which started shipping last month, can display images at 1136 by 640 pixels. That is a bit less than smartphones such as Samsung's Galaxy S III, which has a 1280 by 720 pixel resolution screen.

But Apple and Samsung continue to work together on some fronts. Samsung is rumoured to be manufacturing Apple's first home-designed A6 chip on the 32nm process. Apple borrowed earlier processor designs from Samsung.

LG dominated the tablet panel market in 2011 with a 46% market share, followed by Samsung, which had a 35% market share, according to IHS iSuppli. The tablet panel shipments totaled 81.3 million in 2011 and will grow this year alongside tablet shipments, the research firm said.