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LG Display, Huawei to Sign Long-term Smartphone OLED Supply Deal
Huawei’s Needs
LG Display, Huawei to Sign Long-term Smartphone OLED Supply Deal
  • By Cho Jin-young
  • September 20, 2017, 02:00
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LG Display and Huawei is expected to sign an agreement for long-term and stable supply and demand of small and mid-size OLED panels at the top management meeting in Korea on Oct. 3. (photo courtesy: LG Display)
LG Display and Huawei is expected to sign an agreement for long-term and stable supply and demand of small and mid-size OLED panels at the top management meeting in Korea on Oct. 3. (photo courtesy: LG Display)

 

LG Display Vice Chairman Han Sang-beom will meet Huawei CEO Richard Yu earlier next month. At the meeting, component producer LG Display and Huawei, the largest customer of small and mid-size organic light-emitting diode (OLED) panels in China, are expected to sign a long-term supply contract. Therefore, all eyes are on how the meeting between heads of Huawei, which threatens Samsung Electronics and Apple, and LG Display, a viable competitor of Samsung Display, will affect the industry.

According to industry sources on September 19, Vice Chairman Han will have a top management meeting (TMM) with Huawei CEO Richard Yu at the plan in Paju on October 3. A TMM refers a meeting between CEOs of subsidiaries of LG Group. For the TMM next month, the two heads of LG Display and Huawei will make a final conformation for details made by working-level officials of the two companies.

The deal is said to be a binding agreement for long-term and stable supply and demand of small and mid-size OLED panels. It is not just to supply tens of thousands of panels next year but to establish a mutual growth model of the two companies so that they can lead the market.

LG Display is planning to supply panels manufactured at the E2 and E5 OLED plants, which are currently in operation, to Huawei as well as to additionally supply more products produced at the E5 and E6 plants in the future. The company will supply 2 million to 3 million small and mid-size OLED panels worth 200 billion to 300 billion won (US$176.76 million to 265.13 million) next year. Meanwhile, Huawei is planning to use more LG Display’s OLED panels in its premium smartphone flagships in the future. An official from the industry said, “The figure is insignificant for now but the supplies will significantly grow as the number of Huawei’s OLED smartphone increases. Huawei is expected to continue its two-track strategy of having both LG Display and Samsung Display as its supplier.

Some market watchers say that LG Display and Huawei has entered into partnership as Samsung Display, which has the leading position in the industry, is struggling to meet the demand of small and mid-size OLED panels. Samsung Display is having difficulties to supply the products even to Samsung Electronics and Apple so Huawei has made a turn. In fact, Huawei will use Samsung Display’s OLED panel in its Mate 10 strategic smartphone scheduled to be released in the middle of next month but the panel is not a flexible but a rigid OLED. An official from the industry said, “Samsung Display has a clear supply priority so there are a lot of complaints from Chinese smartphone makers that have failed to receive products in time.”