While Samsung Electronics and LG Display (LGD) are engaged in TV panel collaboration, it has been reported recently that the two sides are having disagreements over the future supply scale of TV panels.
Citing industry sources, Korea's Chosun Biz stated that Samsung and LGD have different opinions regarding the supply contract for TV panels. Samsung is said to be requesting around 5 million LCD panels from LGD, but LGD is proposing that, on top of Samsung's requested volume, it would supply an additional 2 million OLED panels.
Some viewpoints believe that because Samsung is more conservative about demand in the TV market, LGD's proposed conditions could put pressure on Samsung. On top of that, the prices of TV LCD panels have remained high. From Samsung's perspective as a "TV manufacturer," it might be hesitant to accept LGD's proposal.
From LGD's perspective, the proposal to increase the supply to Samsung could be an attempt to turn around its performance by the fourth quarter of 2023. According to LGD's previously announced 2023 third-quarter financial report, its revenue was around KRW4.78 trillion with an operating loss of KRW662.1 billion. While the revenue was similar to the second quarter of 2023, the operating loss was KRW200 billion worse.
It's reported that Samsung, after launching TVs with LGD OLED panels in 2023, is reportedly in discussion with LGD to increase procurement of TV LCDs in 2024. The securities industry also previously pointed out that major TV manufacturers like Samsung are reducing their procurement of LCD panels from Chinese suppliers and gradually increasing the proportion from regions outside of China.
Given the competitive corporate relationship between Samsung and LGD, the two sides were not willing to have direct contractual relationships in the past. However, the geopolitical influences and the supply chain risks arising from US-China tensions have gradually led to this collaboration between Samsung and LGD.