Little Progress in Price Negotiations with LG Display
Samsung Electronics' negotiations on OLED panels with LG Display are stuttering as the two companies are failing to narrow their differences on prices.
The two companies are having a tug-of-war on prices. Samsung Electronics wants to purchase OLED panels from LG Display at prices which are lower than those for LG Electronics, but understandably, this is a demand that LG Display cannot accept.
Samsung Electronics is pondering how to reorganize its TV lineup. The company is expected to place micro LED TVs at the top of its lineup, with mini LED TVs (Neo QLED TVs) coming next and then OLED TVs. If the company adopts this lineup, it should bring down the OLED panel prices as much as possible.
“If OLED TVs are placed below existing premium TV models, their prices should be set accordingly, but under the current circumstances, it is difficult to lower OLED TV prices,” an industry insider said. “I thinks this makes price negotiations more difficult.”
Some analysts say that Samsung's launch of QD-OLED TVs, which is originally slated for the first half of 2022, may also be delayed. Samsung Display started volume production of QD displays in November 2021, but the yield is not stabilized yet.
Samsung Display's QD-OLED panel production capacity is 1 million panels per year. But in light of its low yield, industry insiders say it will be able to produce 500,000 to 600,000 units annually. But this volume is too small to meet Samsung Electronics' panel demand. According to market research firm Omdia, Samsung Electronics’ QLED TV shipments reached 9.43 million units in 2021.
Industry sources say that Samsung Electronics and Samsung Display are also having difficulties in negotiating on the prices of QD-OLED panels.