LG Display to Supply OLED TV Panels to Samsung Electronic

South Korea’s LG Display Co Ltd (034220. KS) will start supplying high-end TV panels to Samsung Electronic Co Ltd (005930. KS) from as early as this quarter, three sources said, in a deal that will help the loss-making flat-screen maker turn profitable. LG Display aims to supply 2 million units next year and boost shipments to 3 million and 5 million units in subsequent years, two sources with direct knowledge of the matter said. The sources added that initial supplies to Samsung would likely be 77-inch and 83-inch white OLED (WOLED) TV panels.

LG’s OLED screens are considered among the best in the world, earning top marks from professional reviewers and attracting consumers who want to own what is known as a “premium” TV. They offer a wider viewing angle, higher contrast ratio, and richer colors than liquid-crystal display (LCD) models. But they are more expensive to make and require special manufacturing equipment.

The new agreement with Samsung could boost LG’s profitability as it shifts production capacity from LCD TVs, which account for nearly all of its sales and profits. The company is also expanding its 8.5-generation OLED plant in Guangzhou, China. Earlier this year, LG separated its mid to large-size panel businesses from its OLED business into separate cash-generating units. This was done to reflect the changing nature of OLED technology, characterized by volatile prices and lower margins than other displays.

Sources familiar with the matter said that LG is focusing on the premium TV market, where it is the largest supplier of OLED panels, and will continue to expand its capacity. It is considering building a third OLED plant in China to meet increased display demand. It will also upgrade its facilities to increase output and lower costs.

In addition to its television business, LG Display is the biggest producer of OLED panels for mobile phones. This year, Apple Inc’s iPhone lineup will be equipped with OLED screens, which are more energy-efficient than LCD screens and have a more natural color rendering. This is expected to eat into LCD production and push OLED demand.

LG is also expected to start supplying Micro LED screens for Apple’s Watch series, which are used for outdoor and professional watch applications. In addition, it will begin mass producing the 2.13-inch screen for the new Apple Watch Ultra 2 this month, designed to be worn in extreme conditions.

Last week, Korean media reported that Samsung Electronics Co Ltd (005930. KS), Samsung’s parent, is considering a deal to buy LG’s OLED panels for its smartphones and tablet computers. Samsung has its unit that makes OLED panels for Samsung Electronics’ smartphones, but that division has yet to catch up with rival LG’s screen production capacity. Samsung’s OLED TVs have received favorable reviews, but their sales are still relatively modest. As a result, a deal with LG could boost its share of the global premium TV market.

Sabrina Gonzalez

Sabrina Gonzalez is a professional writer who is passionate about writing blogs and website content. With 10+ years of experience in freelancing world, she has gained a wealth of knowledge and insights on various topics. Throughout her career, Sabrina Gonzalez has worked with many popular journal magazine site and has helped with her writing expertise. In her spare time, she enjoys reading, travelling, painting and some more, which she often incorporates into her writing. Through her writing, Sabrina Gonzalez aims to fulfill the writing needs and to share her knowledge on different topics. She believes that readers should be knowledgeable too and hopes to inspire her readers.

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