|LG Electronics’ OLED TV lineup / Courtesy of LG Electronics|
By Kim Bo-eun
Attention has gathered over a media report that the global No. 1 TV maker Samsung is in talks to buy Organic Light-Emitting Diode (OLED) panels from its rival LG’s display unit, as TV manufacturers are seeing their profitability deteriorate due to the rise in liquid crystal display (LCD) prices.
Samsung is not producing large OLED TV panels, because it earlier determined the panels would not make money. LG, the second largest player in the global TV market, leads in OLED TVs. Samsung has denied the report.
OLED TVs are a premium segment, but the recent rise in LCD panel prices has led to a narrowing of the gap between OLED and LCD TVs.
According to market researcher Omdia, the price of a 55 inch 4K LCD panel surged 60 percent to $194 in February from $121 in July 2020. The rise is attributed to a spike in demand amid the COVID-19 pandemic. Projections are that LCD panel prices will rise by up to 6 percent year-on-year in the second quarter.
The rise in LCD prices is dealing a blow to TV makers as they account for more than half of TV manufacturing costs. Samsung’s display making unit is getting ready to produce quantum-dot displays as next generation TV display panels, but this is set to take some time.
Meanwhile, forecasts show production for OLED TV displays is set to grow this year, backed by strong demand. According to market tracker Display Supply Chain Consultants, OLED TV panel production is forecasted to more than double from the same quarter in 2020.
LG Display is in the process of expanding production lines based on the surge in demand for OLED panels.
For LG Display, securing Samsung as a client would boost its market share. LG Display is set to produce 8 million large OLED panels this year, but this only accounts for 4 percent of the market for TV displays. LCD TVs account for over 90 percent of the market.
A Samsung official said “TV makers are not so much affected by the rise in LCD panel prices. As the No. 1 TV brand, Samsung’s QLED TVs are doing well and there would be no reason to opt for OLED displays when QLED panels are superior.”
LG Display CEO Jeong Ho-young told reporters Friday he could not comment on the report.
Samsung had 31.9 percent of the global TV market share in 2020, followed by LG with 16.5 percent and Sony with 9.1 percent.