After years of negotiations and speculation, Samsung Electronics has officially decided to procure OLED TV panels from its rival, LG Display, marking a significant shift in the television market. The deal, confirmed by three unnamed sources, brings an end to a long-standing debate over LCD versus OLED within Samsung and opens a new chapter in the relationship between the two South Korean tech giants.
The potential partnership had been the subject of industry chatter for several years. In 2021, whispers of a deal that would see Samsung resurrect its OLED TV business were prevalent. However, later that year, an official from Samsung insisted that their quantum-dot based LED (QLED) TVs surpassed the picture quality of OLED TVs. Furthering the uncertainty, rumors circulated in 2022 that the supposed deal had fallen through over pricing disputes.
However, according to today’s report from Reuters, LG Display and Samsung have finally inked a deal involving “high-end TV panels”. While neither company has officially commented on the matter, anonymous sources confirm the collaboration.
The agreement reportedly stipulates that Samsung will receive 2 million OLED TV panels from LG Display in 2024, with subsequent deliveries of 3 million and 5 million units in the years following. Initially, Samsung is likely to receive 77- and 83-inch WOLED TV panels. This agreement marks a considerable expansion from the previously rumored 200,000 WOLED TV panel deal discussed in April.
Historically, Samsung halted production of OLED TVs after 2013 due to high prices and a belief in the potential of its QLED TVs to compete in terms of image quality and cost. David Lowes, chief marketing officer for Samsung Electronics Europe, stated in 2017 that Samsung did not intend to reenter the OLED market as they believed QLED was “free of burn-in issues and cost-effectively scales for larger screens”.
Despite this, OLED TVs have become increasingly popular due to their impressive contrast and the introduction of techniques such as gently shifting pixels to reduce the risk of burn-in. This popularity surge, combined with Samsung’s reintroduction to the OLED TV market in 2022, highlights the growing demand for OLED technology.
Currently, Samsung’s OLED TV line relies on Samsung Display’s quantum dot-based OLED panels (QD-OLED). A recent expansion extended the QD-OLED TV range to include sizes up to 77 inches. However, with the newly confirmed deal with LG Display, Samsung could broaden its OLED TV offerings, introducing larger sizes and more affordable price options.
The Samsung-LG Display partnership is also likely to be of strategic importance to the South Korean government, as the country recently lost its top display maker status to China. Reports have indicated that governmental pressure to “play nicely” has been exerted over both companies in light of Chinese firms like BOE driving up LCD prices.
Competition in the LCD TV market is heating up, with Samsung facing significant challenges from cost-effective alternatives offered by Chinese manufacturers such as TCL. Meanwhile, both Samsung and LG have reported declining profits, with Samsung’s overall profits down 95 percent in Q1 2023 and LG not turning a profit since Q2 2022.
In this context, the OLED deal between Samsung and LG Display not only promises financial gains for LG but also provides Samsung with an opportunity to expand its portfolio and increase its 6.1 percent OLED TV market share.
Despite Micro LED being tipped as a future player in the TV tech war, the current focus remains on OLED. With its impressive contrast, falling prices, and increasingly competitive brightness, OLED is commanding attention. As the LCD market becomes saturated and price-competitive, this OLED partnership could be the lifeline Samsung and LG need to stay in the game.
