Samsung to collaborate with rival LG in the field of television

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Samsung to collaborate with rival LG in the field of television

LG OLED TV / Courtesy LG Electronics
LG OLED TV / Courtesy LG Electronics

By Kim Yoo-chul

Samsung Electronics, the world’s largest TV maker, plans to introduce new TVs to North America and Europe early next year using an advanced organic light-emitting diode (OLED) supplied by a display subsidiary. from rival LG Electronics, sources and analysts familiar with the matter said on Monday.

“Based on our internal investigation into Samsung’s TV supply chain, it’s fair to say that Samsung Electronics recently completed quality testing of TVs using OLED panels manufactured by LG Display and integrated LG Display into its supply system. Samsung Electronics is considering releasing TVs using LG OLED panels. in North America and Europe at the earliest in the first half of next year, ”said a senior fund manager at a US-based investment bank in Seoul by phone.

Neo QLED TV / Courtesy Samsung Electronics
Neo QLED TV / Courtesy Samsung Electronics

Regarding the estimated volume that Samsung intends to buy initially from LG, the manager replied: “The ranges will vary between 1.5 million and 2 million sheets of glass. In terms of estimated contract size, if Samsung officially signs the contract with LG, it will be around a few billion dollars. “

Representatives for Samsung Electronics and LG Display declined to comment due to the sensitivity of the issue. Faced with a shortage of liquid crystal display (LCD) panels in 2017, Samsung attempted to source the displays from LG’s display subsidiary, majority owned by LG Electronics.

But Samsung Electronics ended up asking its display subsidiary to supply the displays instead by increasing the output.

In fact, Samsung hasn’t been a huge fan of OLED TVs. The company left the OLED TV business years ago.

The partnership with LG, according to sources and officials, illustrates Samsung Electronics’ shift in strategy in terms of diversifying its panel supply channels beyond Samsung Display, as conventional LCD panels become much more expensive. Additionally, Samsung is inclined to explore new alternatives other than LCD displays which are price sensitive and may reduce profits when the market is down.

“Samsung’s decision to use LG’s OLED panels only seems smart from a business perspective. Given Samsung Display’s limited supply of OLED panels, Samsung Electronics plans to pursue a ‘two-way’ approach to its OLED TV business by putting its TVs using LG panels on a budget, ”an executive said. one of Samsung’s local partner companies.

Samsung markets so-called QD-OLED televisions featuring self-emitting micro LED bulb technology. But in terms of production yields (defect rate) and supply volume, Samsung Display has yet to achieve economies of scale. According to Market Tracker Display Supply Chain Consultant (DSCC) estimates, LG Display has the capacity to produce 8 million OLED glass sheets per year for televisions and is the leading supplier of OLED panels in the world.

Samsung Vice President Han Jong-hee, who oversees TVs and mobile phone companies, will deliver his updated strategies and plans for the OLED TV business to major retailers and buyers on the sidelines of his participation in the Las Vegas tech show early next year. Said Chung Won-seok, analyst at Hi Investment.

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