Samsung Electronics has reportedly reignited its plans to sell TVs based on LG Display’s White OLED technology, resuming negotiations over a large purchase of panels.
The negotiations were reported to have begun back in November 2021 and then dragged on until the middle of 2022, ultimately breaking down due to a disagreement over the price of the panels.
Now, South Korean news website The Elec says the talks are back on, with Samsung said to be interested in buying between 200,000 and 300,000 W-OLED panels as an initial supply. The report says that if an agreement is struck, Samsung could launch its first W-OLED TVs early next year.
The negotiations come at a time when Samsung has become more reliant on Chinese suppliers for LCD panels that are used in its Neo QLED TV range. Samsung Display quit making LCD panels itself last year, and LG Display has significantly reduced its LCD production capacity, effectively handing the market over to Chinese suppliers.
Unfortunately for Samsung, it seems that Chinese LCD panel makers are now playing hardball, offering “less favourable terms” to the company now that they have effectively cornered the market. Such claims were backed up by comments earlier this week from UBI Research analyst Choong Hoon Yi, who told The Elec that China’s effective monopoly on LCD displays could have negative consequences for Samsung’s TV business.
It’s said that Chinese LCD makers are demanding that Samsung pay higher prices for their products. As a result, Samsung has decided to resume talks with LG Display in order to reduce its reliance on LCD technology.
Although Samsung Display manufactures QD-OLED panels, it only has a limited capacity, meaning that much of Samsung’s TV business is reliant on LCD. In the case of Samsung’s Neo QLED TVs, it uses regular LCD panels overlaid with a Quantum Dot film to enhance the picture quality.
The Elec said that if Samsung is able to agree a deal to procure W-OLED panels from LG Display it will be able to diversify its portfolio of OLED televisions with mid-range models. If that happens, it will likely scale back its Neo QLED TV lineup from next year. Of course, any deal with LG Display would mean Samsung also has more leverage in its ongoing negotiations with Chinese LCD panel makers, so there are multiple aspects to consider.
LG Display refused to countenance Samsung’s reported lowball offer last year. Reports at the time said Samsung was trying to secure a lower price for LG’s OLED panels - even lower than what LG Electronics pays. However, LG Display recorded an operating loss of almost 876 billion won (around £572 mllion) in its most recent quarter, so it may be more amenable to Samsung’s proposal now, The Elec said.
