Samsung Electronics and LG Display have reportedly reached an agreement to collaborate on organic light-emitting diode (OLED) displays, marking a significant development in the TV industry. The partnership between these South Korean giants is poised to bring about substantial changes and innovation.
This landmark deal between Samsung and LG Display holds promising prospects for consumers, as Samsung aims to introduce a more affordable range of OLED TVs. Historically, LG Display has been the sole producer of cost-effective OLED TV screens, as exemplified by the popular LG C3 OLED models. However, this newfound collaboration unlocks new possibilities for Samsung, allowing them to broaden their options and offer consumers a wider selection of OLED-based televisions.
According to a report by Reuters, LG Display is set to commence the supply of OLED TV panels to Samsung Electronics as early as the second quarter. The objective is to ship approximately 2 million units next year, further increasing to 3 million and 5 million units in the following years. The initial supplies are expected to consist of 77-inch and 83-inch white OLED (WOLED) TV panels, marking a significant step in their collaboration.
This strategic partnership holds substantial value, as the 2 million units planned for next year alone amount to an estimated worth of $1.5 billion. Furthermore, this quantity represents roughly 20 percent of LG Display’s annual OLED panel production at maximum capacity.
With the initial focus on larger-sized panels, Samsung aims to enhance its product lineup by leveraging LG Display’s expertise in OLED technology, thereby meeting the increasing demand for high-quality displays in the market.
As competition intensifies among Chinese vendors in the lower-end market, Samsung’s focus on expanding its presence in the OLED TV space is evident. Notably, OLED panels command a price nearly five times higher than liquid-crystal display (LCD) panels, emphasizing Samsung’s commitment to delivering premium viewing experiences.
The deal has the potential to propel Samsung’s position in the OLED TV market, potentially surpassing Sony Corp as the second-largest OLED TV supplier globally. With plans to discontinue its own LCD production and shift towards purchasing Chinese-made panels, Samsung is strategically increasing its output of QD-OLED versions, signaling its dedication to innovative display technologies.
Samsung currently captures a smaller share of the OLED TV market at 6.1 percent, while LG Electronics and Sony dominate with 54.6 percent and 26.1 percent, respectively, according to Omdia. However, this supply agreement has the potential to reshape the competitive landscape by catapulting Samsung ahead of Sony, further solidifying its position in the OLED TV market.
The OLED display deal with Samsung Electronics comes as a beneficial move for LG Display, addressing its current production capacity challenges. With its OLED TV factories in South Korea and China operating below capacity, LG Display seeks additional avenues to utilize its production capabilities effectively.
Furthermore, the agreement proves advantageous for LG Display, providing an estimated value of at least $1.5 billion and accounting for approximately 20-30 percent of its overall large-size panel manufacturing capacity. This collaboration enables LG Display to approach full capacity and optimize its resources efficiently.
LG Display has entered an agreement to supply Samsung with 77-inch and 83-inch WRGB OLED panels, with an estimated total supply of 200,000 to 300,000 units this year. The collaboration is expected to strengthen next year, as LG aims to provide Samsung Visual Display with anywhere between 1 million and 1.5 million OLED TV panels.
