Samsung to buy OLED TV panels from LG Display
According to a Reuters report, Samsung has struck a deal to buy LG's OLED TV panels. LG Display is set to provide Samsung with 77- and 83-inch white OLED panels, a move that could bolster its profitability amidst the intense competition from Chinese manufacturers in the LCD panel market.
This marks the first instance of Samsung acquiring OLED panels from its domestic competitor, LG, after years of speculation around such a deal. The purchase signifies a major shift for Samsung, which halted OLED TV production in 2015 due to the panels' high costs and a misguided prediction that the market wasn't ready for these high-end TVs. Instead, Samsung focused on its less expensive yet less superior QLED TVs, a variant of LED LCD. However, OLED TVs have since taken over the high-end market.
Samsung made a comeback to OLED recently, launching its first QD-OLED TV last year, with Samsung Display providing OLED panels for Sony's inaugural QD-OLED TV. It's reported that LG Display will deliver 2 million OLED panels to Samsung in 2024, 3 million in 2025, and 5 million by 2026.
Market research from Omdia indicates that LG holds a majority share in the OLED TV market at 50 per cent, with Sony trailing at 26 per cent, and Samsung only capturing a meagre 6 per cent.
The agreement is well-timed for LG Display, which recently acknowledged sluggish TV demand and lower than forecasted OLED TV panel sales in its latest quarterly earnings report.
Similarly, the deal arrives at a favourable time for Samsung Electronics, which has been grappling with a decline in semiconductor demand and a reduction in memory chip production. Despite having been the leader in the global TV market for 17 consecutive years, Samsung has struggled against Chinese competitors offering less expensive LCD TVs. It now evidently recognises the significant profit potential it overlooked in large OLED TVs.
Source: Reuters
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