Cooperation for Global Competition
Samsung Group and LG Group are working more and more closely with each other in the IT and consumer electronics industries. For example, Samsung Electronics is discussing the supply of smartphone batteries with LG Chem after the discontinuation of the Galaxy Note 7 attributable to battery explosion. LG Electronics smartphones such as the G5 are adopting DRAM and NAND flash chips manufactured by Samsung Electronics, too. LG Innotek recently began to supply 2 metal chip-on films, a smartphone component, to Samsung Electronics.
Industry insiders are regarding their cooperation as an essential element for the growth of those sectors. Until 2010 or so, both groups were running the same businesses, such as TV, mobile phone, consumer electronics and display, except for semiconductor. Their business strategies began to show some difference with the advent of smartphones and now they have reached a point where they are required to be complementary to each other.
These days, the LG Group is focusing on automotive electronics and expanding the business via LG Electronics, LG Chem and LG Innotek. LG Display is planning to manufacture automotive OLED panels from late next year as well. The Samsung Group is showing few noticeable movements in this industry.
They are moving in different directions in the TV market, too. LG is increasing its large OLED panel manufacturing facilities whereas Samsung is concentrating on quantum dot display. “Each of the two will have to procure components and materials it does not produce with the help of the other more and more frequently down the road,” said an industry source.