LG Display is planning to supply its LCD panels for TVs to Samsung Electronics. Samsung Electronics is expected to sign a panel supply deal with LG Display by the end of the first quarter this year and receive panels as early as June.
According to electronics and display industry sources on Feb. 1, LG Display recently agreed with Samsung Electronics to supply its two to three models of 40- to 60-inch LCD TV panels. The two companies are discussing the contract details, such as model, price and supply time, and are about to enter into a final agreement.
This is the first time for Samsung Electronics to manufacture TVs with LG Display’s panels. Until now, Samsung and LG haven’t dealt in panels each other on the grounds that they have been competing for first place in the global TV market.
The reason why LG Display has decided to supply LCD TV panels to Samsung Electronics is that they have common business interests. Samsung Electronics is in more urgent situations. As Japan’s Sharp abruptly informed Samsung at the end of last year that it will stop supplying 4.5 million LCD panels for 40-, 60- and 70-inch TVs which were scheduled to provide this year, Samsung Electronics has no choice. To be sure, the company can receive the panels from Samsung Display and Taiwan’s Innolux and China’s BOE. However, Samsung has no option but to request a supply of panels to LG Display, the world's largest LCD panel maker, in order to make up the shortfall.
LG Display also has the advantage of diversifying its business relations through the partnership with Samsung Electronics, the world’s largest TV maker. LG Display currently produces LCD TV panels in a variety of sizes including 32-, 37-, 42-, 43-, 47-, 49-, 50- and 55-inches. An industry official said, “Production efficiency, seasonal supply availability and prices vary depending on the size of panels and complicated problems, including production schedule by inches, are involved. So, the two companies are discussing about the details on the major premise to supply multiple models.”
The problem is how the two will agree on the supply of large-size LCD panels which are more than 60 inches in size. LG Display is seeking to provide 60-inch UHD panels based on M+ technology which has been disputing with Samsung Electronics. However, Samsung Electronics shows disapproval of the plan. Previously, Samsung Electronics has been pointing out that LG Display’s M+ UHD panels actually fall short of UHD resolutions.