The negotiation between Samsung Electronics and LG Display to supply liquid-crystal display (LCD) panels for televisions has been at a standstill for nine months. LG Display was planning to supply large LCD panels to Samsung Electronics in the first half of this year but the two companies haven’t signed the contract until the end of the third quarter.
According to electronics industry sources on September 4, LG Display was planning to decide on details, including model specifications and supplies, of the agreement to supply 40 to 60-inch three large LCD panels to Samsung Electronics in July and start supplying them. However, the two companies haven’t reached the agreement yet. Currently, the large LCD panels are produced at the P7, P8 and P9 facilities located in Paju.
Samsung Electronics has been in trouble in part supply as after Sharp decided to stop supplying LCD panels for televisions which was 4.5 million on annual basis at the end of last year. In this regard, Samsung Electronics was going to be supplied 700,000 to 1 million units of LCD panels from foreign companies such as Taiwan’s Innolux and China’s BOD as well as LG Display.
However, Samsung and LG haven’s signed the LCD panel supply contract as they still show different opinions.
The two companies have started negotiation in January but still failed to close the deal. This is largely due to the fact that LG Display has had difficulties in adjusting production and supplies of existing customer companies when the company had problems with the component supply-demand balance.
Technical issues are another obstacle to the contract. There has been some dissent within Samsung on the supply of “M+” Panel which has put the two companies into the technology argument.
M+ Panel is an ultra-high definition (UHD) LCD panel that uses new RGBW method. Samsung has pointed out that the M+ Panel fall short of the resolutions of UHD panels. However, all of the large LCD panels larger than 50 inches, which are produced by LG Display, uses the M+ technology.
In addition, LG Display is seeking to supply the panels for the long term of over three years so it takes a long time for the two companies to reach the agreement.
Accordingly, Samsung Electronics’ televisions equipped with LG Display’s panels will not be able to be released by the end of the year. This is because it usually takes three to four month for panel producers and TV producers to sign the contract and release products.