Monday, September 25, 2023

Samsung admits defeat and reportedly closes a deal for LG’s OLED TV panels

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Samsung has reportedly signed a deal for LG’s OLED TV panels. Reuters reports that LG Display will supply high-end 77- and 83-inch white OLED panels to Samsung in a deal that could help it turn a profit amid stiff competition in LCD panels from Chinese rivals.

This is Samsung’s first time buying OLED panels from its South Korean rival after years of rumors of similar deals. It’s also a huge admission of defeat after Samsung stopped making OLED TVs in 2015, citing the high cost of the panels in a miscalculation that the market wouldn’t be ready for such high-end TVs. Samsung continued with its cheaper but inferior QLED TVs – a variant of LED LCD – but OLED models dominated the premium market.

LG has more than 50 percent market share of lucrative OLED TVs

Samsung recently returned to OLED with its first QD-OLED TV launched last year, and Samsung Display is supplying OLED panels for Sony’s first QD-OLED TV. Reuters reports that LG Display will deliver 2 million OLED panels to Samsung in 2024, 3 million in 2025 and then 5 million in 2026.

LG has captured more than 50 percent market share of OLED TVs with Sony at 26 percent and Samsung at just 6 percent, according to market research from Omia.

The deal comes at an ideal time for LG Display after it admitted there was “sluggish demand” for TVs and lower-than-expected sales of OLED TVs in its recent quarterly figures.

The timing is also good for Samsung Electronics, after the company had another terrible quarter due to weaker demand for semiconductors and a reduction in memory chip production. While Samsung dominates the global TV market 17 years in a row, it has faced stiff competition from Chinese rivals with cheaper LCD TVs. It now clearly sees the high-margin opportunity it missed with large OLED TVs.

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