Stalemate in Samsung-LG OLED Talks

Samsung Electronics and LG Display, two prominent players in the electronics industry, find themselves at a crossroads in their negotiations concerning the supply of White Organic Light-Emitting Diode (WOLED) panels beyond the year 2024. This impasse stems not only from the challenging landscape within the television sector but also from the subdued operational efficiency of Samsung Display's (SDC) QD-OLED production facilities, which is posing a significant hurdle to the advancement of these negotiations.

As reported by the reputable South Korean news outlet, Theelec, LG Display is expected to provide Samsung with a quantity of WOLED panels in 2023 that falls below 100,000 units. Confidential sources have disclosed that discussions between Samsung and LGD regarding WOLED procurement have ground to a halt.

Previously, it was revealed that Samsung had outlined plans to expand its acquisition of WOLED and LCD TV panels from LGD, commencing with 83-inch WOLED TV panels in 2023. However, the pace of progress in negotiations between the two conglomerates has been less than brisk.

The sluggish nature of these negotiations is predominantly attributed to concerns stemming from the less-than-optimistic outlook for the television industry in 2024 and Samsung Group's reservations about Samsung's intentions to increase its WOLED panel procurement from LGD.

It is pertinent to note that Samsung has intentions to continue utilizing Mini LED panels for its esteemed Neo QLED series in 2024, which constitutes an integral component of its premium high-end television lineup. Given the challenging market dynamics in the television industry, Samsung has set a sales target of no less than one million units for its Neo QLED TVs. Furthermore, Samsung will be sourcing QD-OLED panels from SDC, a strategic move that reduces the scope of WOLED panel acquisitions from LGD.

Reflecting on the years 2020 and 2021, characterized by the COVID-19 pandemic, global OLED TV shipments witnessed a surge. This phenomenon was primarily driven by soaring prices of LCD TV panels and government incentives extended by major nations. However, in recent times, LCD TV panel prices have once again escalated, although they remain below the levels recorded during the pandemic. This shift may be attributed to the presently lackluster demand in the market.

On another front, Samsung Group has expressed reservations regarding Samsung's proposed expansion of WOLED panel procurement from LGD. This divergence of opinions between the two entities constitutes a significant impediment to the progress of negotiations. Additionally, the underutilization of SDC's QD-OLED production lines could exacerbate if Samsung chooses to augment its WOLED procurement from LGD.

Experts within the South Korean industry anticipate that LGD's supply of WOLED panels to Samsung in 2023 will likely not surpass 100,000 units. Concerning the prior disclosure regarding Samsung's acquisition of 83-inch WOLED panels from LGD, Samsung representatives have clarified that they remain committed to procuring these panels from LGD, as they have already disseminated information to international distributors regarding the availability of WOLED TVs.

Simultaneously, LGD has extended an offer to supply Samsung with 27-inch and 31.5-inch WOLED monitor panels. Nevertheless, Samsung has displayed restrained interest in this proposition, given that comparable panels are presently sourced from SDC. LGD currently furnishes 27-inch WOLED panels to LG Electronics and intends to commence supplying 31.5-inch WOLED panels commencing in late 2023.