SEOUL (Reuters) – South Korea’s LG Display Co Ltd will start supplying high-end TV panels to Samsung Electronic Co Ltd from this quarter, three sources said, in a deal that would help the display maker profitable.
LG Display aims to supply 2 million units next year and increase shipments to 3 million and 5 million units in the following years, two sources with direct knowledge of the matter said. Initial supplies for Samsung would likely be 77-inch and 83-inch white OLED (WOLED) TV panels.
For Samsung, the deal highlights how it looks to expand into higher-end organic light-emitting diode (OLED) TVs as competition at the lower end with Chinese suppliers increases. OLED panels cost almost five times more than liquid crystal display (LCD) panels.
With this deal, Samsung could overtake Sony Corp as the world’s second largest provider of OLED TVs.
Analysts have speculated that LG Display was in talks to supply OLED TV panels to a new customer. Reuters is the first to report the details of the deal with Samsung Electronics.
All the sources declined to be named because the deal is not public.
Both LG Display and Samsung Electronics declined to comment.
Samsung Electronics, the world’s largest TV maker, has been slower than local rival LG Electronics Inc to adopt OLED TVs, arguing that the technology is better suited for small devices like smartphones and tablets, partly due to the high cost. of the panels.
For LG Display, shipments of 2 million OLED panels will be a big boost, worth at least $1.5 billion and worth around 20-30% of its total large OLED panel manufacturing capacity. , taking it to its maximum capacity, according to analysts
The company has been operating its OLED factory below capacity due to a limited customer base as the pandemic-driven surge in demand for new TVs has slowed amid skyrocketing inflation and a slowing economy. .
LG Display supplies OLED TV panels to LG Electronics and Sony. It also supplies smartphone screens to Apple Inc.
Samsung Electronics has its own display manufacturing unit, Samsung Display, which focuses on OLED screens for mobile phones made by Apple and Samsung.
In OLED TVs, Samsung currently has a 6.1% market share, behind LG Electronics with 54.6% and Sony with 26.1%, according to market research firm Omdia.
The market is expected to grow nearly 6% to $11.7 billion this year and $12.9 billion by 2027, according to Omdia.
(Reporting by Heekyong Yang; Editing by Miyoung Kim and Sonali Paul)
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