Samsung and LG ↗ dominate the display market, producing screens for various devices like smartphones, tablets, and televisions. Notably, both companies profit from every iPhone sold. However, the challenge lies in meeting the global demand for displays. To address this, LG Display and Samsung Electronics have struck a major business deal, with LG Display agreeing to supply Samsung with OLED TV panels. In 2023 alone, LG Display will provide Samsung with 2 million OLED TV panels.
Recent reports indicate that LG Display will commence the supply of high-end TV panels to Samsung Electronics this quarter. This agreement could greatly benefit LG Display, which has been facing financial difficulties. As part of the deal, LG Display will deliver 2 million OLED TV panels to Samsung in 2023, with numbers projected to rise to 3 million in 2024 and 5 million in 2025.
Initially, the panels will consist of 77-inch and 83-inch white OLED (WOLED) panels. This move by Samsung demonstrates its commitment to expanding its presence in the upscale OLED TV market. OLED TVs have gained popularity due to their exceptional image quality.
However, their higher cost compared to traditional LCD panels has limited their adoption. By leveraging this deal, Samsung has the potential to surpass Sony and become the second-largest supplier of OLED TVs globally, marking a significant shift in the TV market.
Investors have warmly welcomed the deal, leading to increased share prices for both LG Display and Samsung Electronics. This is a positive development for LG Display, considering its recent financial struggles, having operated at a loss for four consecutive quarters. The agreement will allow LG Display to fully utilize its manufacturing capacity and generate much-needed revenue.
Samsung Electronics will also benefit from the deal. Despite having its own display-making unit, Samsung Display has faced challenges competing with LG Display in the OLED TV market. This collaboration grants Samsung access to LG Display’s superior OLED panels, enabling them to enhance their product offerings and compete more effectively against LG Electronics and Sony.
This deal between LG Display and Samsung Electronics is of course a win-win situation, likely to have a significant impact on the global TV market. It will be intriguing to observe how the market dynamics evolve in the coming years.
