In a significant development in the display industry, South Korea’s LG Display Co Ltd is set to supply high-end TV panels to Samsung Electronic Co Ltd, according to multiple sources. This deal marks a turning point for LG Display, which has been facing losses, as it seeks to become profitable again by supplying panels to its rival.
Strategic Partnership to Drive Growth
LG Display aims to supply 2 million units of high-end TV panels to Samsung from as early as this quarter. The company plans to further increase shipments to 3 million and 5 million units in the coming years. Initial supplies are expected to include 77-inch and 83-inch white OLED (WOLED) TV panels.
Expanding in High-End OLED TVs
For Samsung, this partnership reflects its ambition to expand its presence in the high-end organic light-emitting diode (OLED) TV market, especially as competition intensifies in the lower end with Chinese vendors. While OLED panels are known for their superior display quality, they also come at a significantly higher cost compared to liquid-crystal display (LCD) panels.
Potential Rise in Market Share
By collaborating with LG Display, Samsung has the opportunity to surpass Sony Corp as the second-largest supplier of OLED TVs worldwide. This moves strategically positions Samsung to capture a larger share of the OLED TV market, demonstrating its commitment to staying competitive and meeting the evolving demands of consumers.
Beneficial for LG Display’s Operations
The deal holds immense significance for LG Display as well. Shipping 2 million OLED panels to Samsung represents a major boost for the company, with an estimated value of at least $1.5 billion. This volume would also utilize 20% to 30% of LG Display’s total manufacturing capacity for large-size OLED panels, enabling the company to operate at full capacity.
Analysts view this development as a positive step for LG Display, which has been operating below its maximum capacity due to limited customers and the impact of the pandemic on TV demand.
Key Players in the OLED TV Market
Currently, LG Electronics holds the largest market share in the OLED TV segment with 54.6%, followed by Sony at 26.1%. Samsung Electronics, the world’s leading TV manufacturer, holds a 6.1% market share in OLED TVs.
By strengthening its OLED TV offerings through the partnership with LG Display, Samsung has the potential to enhance its market standing and gain a larger slice of the OLED TV market.
Promising Growth Prospects
The OLED TV market is projected to grow by nearly 6% to reach $11.7 billion this year, with further growth expected to reach $12.9 billion by 2027, according to market research firm Omdia. This underscores the promising opportunities and increasing demand for OLED technology in the TV industry.
As the deal between LG Display and Samsung Electronics unfolds, industry watchers eagerly anticipate the impact it will have on both companies’ market positions and the overall landscape of the OLED TV market.
