Samsung Electronics is likely to adopt liquid-crystal display panels manufactured by LG Display in its TVs that are slated for launch early next year, according to news reports and industry sources Monday.
If the two South Korean tech giants reach an agreement in the ongoing negotiations, it will be the first case of Samsung using panels manufactured by a rival.
According to a news report, the two sides are expected to reach an agreement in the near future, with the aim of unveiling the first “collaborative” TV products between the longtime competitors.
Talks began early this year after Samsung was abruptly cut off by its LCD panel supplier Japan-based Sharp last December, as Taiwan’s Foxconn had acquired the Japanese company in order to expand into the TV market.
To cover the 3 million LCD panels that were supplied by Sharp until last year, Samsung has been holding talks with LG Display, an affiliate of LG Electronics that competes with Samsung in the TV market.
According to Samsung, the two companies are still negotiating, with no conclusion reached yet.
There were rumors that the supply volume would be around 700,000 units in the beginning, but the figure has been cut to 100,000, as the two sides are having a hard time ironing out differences. The figure does not represent a significant volume for Samsung, which ships out around 45 million units of TVs every year.
“Talks are taking longer than expected due to the different technologies and panel specifications sought by each side,” said a Samsung official. “If a decision is finally made to adopt LG panels, Samsung would have to produce a whole new TV set or lineup that fits LG panels.”
According to industry sources, Samsung is most likely to use the LG panels for its 40- to 60-inch TVs. It would not be easy for LG Display to supply more to Samsung due to expected declines in the company’s shipments next year.
“As TV sizes get bigger and bigger with higher picture quality, Samsung’s LCD TV shipments are forecast to decrease, while the company is seemingly lowering its target sales,” a source said.
A presentation by IHS Markit at a display conference last month showed that annual shipments of Samsung’s LCD TVs are projected to drop 9 percent this year and are expected to drop further.
In the display industry, there are expectations that Samsung’s first collaboration with LG may reduce unnecessary tension in the TV market.
“Samsung started maligning LG TVs regardless of LCD or OLED (organic light-emitting diode), as its TV business has been sluggish recently,” an industry official said. “The two’s cooperation may help ease tension in the market.”
By Song Su-hyun (firstname.lastname@example.org