Samsung Electronics is severing ties with BOE, China’s largest display company, and is reorganizing its supply chain. This move comes amid ongoing disputes related to technology infringement and rising uncertainties about China due to U.S.-China tensions. Analysts believe that the company aims to restructure its partnerships, focusing on domestic enterprises.
According to industry sources on Nov. 15, BOE has not only fallen out of the top three suppliers of TV panels for Samsung Electronics in the third quarter but also saw its market share decrease. BOE, a major supplier of Liquid Crystal Display (LCD) panels, accounted for about 10% of Samsung Electronics’ TV panel purchases in the first half of the year, ranking third among the key panel suppliers.
In its third-quarter report, Samsung Electronics excluded BOE from the list of major suppliers of display panels used in devices for TV and monitor screens under its Device Experience (DX) division. This is the first time since the fourth quarter of 2015, nearly seven and a half years ago, that BOE has been excluded as a key panel supplier for products such as TVs and smartphones.
Samsung Electronics is reportedly planning to sever its mid-to-long-term relationship with BOE, which is also a key competitor in the global display market. Samsung Display, a subsidiary of Samsung Electronics, and BOE are engaged in legal disputes over allegations of patent infringement and trade secret violations. Recently, Samsung Display filed a complaint with the U.S. International Trade Commission alleging that BOE had infringed on its trade secrets related to OLED panel and module technology.
Industry insiders anticipate that due to the conflict with BOE, Samsung Electronics will increase its cooperation with other suppliers, including LG Display, Japan’s Sharp, and Taiwan’s AUO. In preparation for the supply chain reorganization, LG Display is expected to increase the operation rate of its Guangzhou, China LCD factory, raising the shipment from 9 million units this year to 16 million units next year.