Samsung Electronics paid a total of 1.9521 trillion won to Chinese companies in the first half of this year to purchase liquid crystal display (LCD) panels for TVs and monitors, according to the Financial Supervisory Service’s electronic disclosure system on Sept. 2.
Most of these panels were produced by Chinese or Taiwanese companies such as CSOT (China), AUO (Taiwan), and BOE (China), meaning that it is safe to say that LCD panels in Samsung’s TVs and monitors were made in China and Taiwan.
Samsung’s LCD panel purchase cost in the first half of this year was 46.7 percent lower than 3.6657 trillion won in the same period of 2022. However, considering that the unit prices of LCD panels dropped by nearly half during the same period and external factors such as a decline in demand for LCDs for TVs, analysts say that its cost of purchasing panels in the first half was similar to the cost in the same period of 2022 or even increased from 2022. In fact, LCD panel prices which were above US$300 for a 65-inch LCD panel in August last year are now in the low US$100s.
Samsung Electronics’ reliance on Chinese panel makers increased, especially as Samsung Display, which produced LCD panels until the first half of last year, has been scratched off from the list of major suppliers this year.
Samsung Display has stopped producing LCDs since June last year. This was due to the declining profitability of its LCD business with a drop in unit costs of LCD panels and the need to select and focus on next-generation displays. In the past, Samsung Electronics purchased about 30 percent of the LCD panels it needed from Samsung Display and the rest from CSOT, AUO, and BOE.
Samsung’s astronomical spending on purchases of LCD panels from Chinese and Taiwanese companies has a lot to do with the composition of its flagship products. The Korean TV giant is still focusing on QLED TVs, a type of LCD TVs, even as a transition to OLED TVs accelerates in the TV market. Of course, Samsung has also introduced Samsung Display’s quantum dot (QD)-OLED panels and LG Display’s OLED panels to create Samsung OLED TVs, but it has not been aggressive in selling them.
This is in contrast to its competitors’ rush to switch to OLED TVs. LG Electronics has already established a dominant position in the TV market as a trailblazer in the OLED TV market. According to market research firm Omdia, LG Electronics continued to lead the global OLED TV market in the first half of this year with a 55.7 percent share by shipments. LG Electronics shipped 1.34 million OLED TVs in the first half of the year. In particular, LG Electronics dominated the OLED TV market of 75-inch and larger models with an estimated 64.2 percent share in terms of shipments.