LG Display in talks to supply OLED TV panels to Samsung

LG Display, a South Korean flat-screen maker, is set to supply high-end TV panels to Samsung Electronics as early as this quarter, Reuters news report said.
LG Display for televisionThis deal holds the potential to help LG Display turn profitable, as it aims to supply 2 million units next year and increase shipments to 3 million and 5 million units in the following years. The initial supplies to Samsung are expected to include 77-inch and 83-inch white OLED (WOLED) TV panels.

For Samsung, this partnership signifies its expansion into the high-end organic light-emitting diode (OLED) TV market, as competition intensifies in the lower-end segment with Chinese vendors. It is worth noting that OLED panels come at a significantly higher cost compared to liquid-crystal display (LCD) panels. If successful, this collaboration could propel Samsung to become the second-largest supplier of OLED TVs globally, surpassing Sony.

Samsung, as the world’s largest TV manufacturer, has been slower to adopt OLED TVs compared to its domestic competitor LG Electronics. Samsung has argued that OLED technology is more suited for smaller devices like smartphones and tablets due to the higher panel costs.

For LG Display, shipping 2 million OLED panels would be a substantial boost, accounting for approximately 20 percent to 30 percent of its total manufacturing capacity for large-size OLED panels. This volume represents a significant step toward reaching full capacity and potentially returning to profitability. The company has been running its OLED factory below capacity due to a limited customer base and a slowdown in demand caused by the pandemic, inflation, and a slower economy.

Analyst Jeff Kim from KB Securities predicts that LG’s production rate will improve, potentially reaching full capacity by next year. This development will lay the groundwork for the company’s return to profitability. LG Display has been incurring losses for four consecutive quarters since Q2 of the previous year, primarily due to weakened global demand for electronic devices.

In addition to supplying OLED TV panels to LG Electronics and Sony, LG Display is also a supplier of smartphone displays to Apple Inc. On the other hand, Samsung Electronics has its own display-making unit, Samsung Display, which focuses on OLED screens for mobile phones produced by Apple and Samsung.

In the OLED TV market, Samsung holds a 6.1 percent market share, lagging behind LG Electronics with 54.6 percent and Sony with 26.1 percent, market research firm Omdia said. The OLED TV market is projected to grow by nearly 6 percent to $11.7 billion this year and reach $12.9 billion by 2027, according to Omdia’s estimates.