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LG Set To Make Samsung TVs

A battle between Japanese and Korean TV manufacturers could see Samsung turn to arch rival LG to make some of their liquid-crystal display panels.

Earlier this year we exclusively revealed that Foxconn the new owners of the Sharp TV manufacturing plants had booted Samsung off their automated production lines. Samsung like several other TV manufacturers was using the Japanese plant to build some of their 3 Series and 5 Series TV’s.

Instead of turning to Chinese manufacturers such as Skyworks or TCL Samsung is set to give the excess capacity to LG a move that will see the two-arch rival working closely together to take on Sharp who are looking to become a major player in the TV.

Recently Sharp moved to take legal action against the Chinese TV brand Hisense who due to problems with their own TV brand, had licensed the Sharp name for the US market. Sharp described the Hisense made TV’s in a complaint (PDF) filed with the San Francisco Superior Court as being shoddily manufactured and deceptively advertised.

They also raise safety concerns about the Hisense TV’s claiming that their brand is being “perceived by consumers as cheap”.

If LG and Samsung reach an agreement in the ongoing negotiations, it will be the first case of Samsung using panels manufactured by a rival. According to the Korean Herald, talks began early this year after Samsung was abruptly cut off by Sharp last December, by the Taiwanese owned Foxconn.

It’s anticipated that LG could initially end up making 700,000 units in the beginning with this falling to 100,000 units.

Insiders claim that the two sides are having a hard time ironing out differences.

The figure does not represent a significant volume for Samsung, which ships out around 45 million units of TVs every year.

“Talks are taking longer than expected due to the different technologies and panel specifications sought by each side,” said a Samsung official. “If a decision is finally made to adopt LG panels, Samsung would have to produce a whole new TV set or line-up that fits LG panels.”

According to industry sources, Samsung is most likely to use the LG panels for its 40- to 60-inch TVs. It would not be easy for LG Display to supply more to Samsung due to expected declines in the company’s shipments next year.

“As TV sizes get bigger and bigger with higher picture quality, Samsung’s LCD TV shipments are forecast to decrease, while the company is seemingly lowering its target sales,” a source said.

A presentation by IHS Markit at a display conference last month showed that annual shipments of Samsung’s LCD TVs are projected to drop 9 percent this year and are expected to drop further.

In the display industry, there are expectations that Samsung’s first collaboration with LG may reduce unnecessary tension in the TV market.

“Samsung started maligning LG TVs regardless of LCD or OLED (organic light-emitting diode), as its TV business has been sluggish recently,” an industry official said. “The two’s cooperation may help ease tension in the market.”

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