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Why Is Samsung Getting Into LG’s OLED Bed?

Samsung’s decision to get into bed with archrival LG Electronics when it comes to supply of OLED panels appears to be more of the devil you know that the devil you can’t trust.

Samsung is apparently trying to reduce its reliance on Chinese panel-making vendors such as BOE Technology and China Star Optoelectronics Technology.

Currently Samsung buys 70 percent of its panels from these Chinese manufacturers. These panels are found in their cheaper TV’s and across a large part of the TV range that Samsung sells in Australia.

The market is closely watching Samsung Electronics’ move to diversify its panel suppliers especially as the move adds credibility to the quality of LG’s OLED panel technology.

According to sources in South Korea Samsung is currently placing orders for white organic light-emitting diode panels from LG Display a move that would not have been contemplated two years ago as Samsung rolled out their Q LED technology claiming it was superior to the OLED technology sold by their archrival.

As we reported yesterday Samsung is tipped to buy two million white OLED display panels from LG Display, in addition to 4 million LCD panels, for their 2022 TV range.

The two are in the final stages of negotiating the price over OLED panels.

The slow pace of mass production of Samsung’s quantum-dot OLED TV panel, a flat-panel technology Samsung Display plans to unveil in January that combines elements of OLED and quantum dot displays, is also making the case for the deal claims the Korean Herald.

The hybrid display technology uses OLED panels as a backlight, unlike the traditional OLED screens whose pixels emit light without a backlight.

Set to be launched at CES 2022 the new Samsung display technology is different from LG’s OLED TVs as the former uses a quantum dot colour conversion layer instead of an OLED colour filter, which market experts perceive to be more efficient in colour representation.

Samsung’s de facto leader Lee Jae-yong pledged in 2019 to spend a total of 13.1 trillion won ($11 billion) by 2025 to research, develop and commercialize quantum-dot OLED technologies.

But market watchers say that the projected production capacity of quantum-dot OLED panels — up to one million units next year — is not enough to keep up with the premium TV manufacturing capacity of Samsung, which sells nearly 50 million TV sets annually.

Samsung Display’s quantum-dot OLED panel production line replaced the Companies current LCD production lines which was discontinued earlier this year.

“Given the expected annual panel production capacity for 2022 at Samsung Display of only 1-milinano units, compared to LG Display’s 11-milinano units, we believe a strategic partnership between Samsung Electronics and LG Display to be a strong possibility,” wrote Jeff Kim, an analyst at KB Securities, referring to Samsung’s quantum-dot OLEDs and LG’s white OLEDs, respectively.

Kim added that Samsung is expected to increase panel orders from LG Display by more than five times next year.

Currently Samsung’s premium range being sold at Australian retailers uses traditional LCD panels lit by LEDs.

Samsung has refrained from using the term OLED for its TV line-up, until the latest quantum-dot OLED technology started to materialise.

This is despite Samsung being a major manufacturer of OLED display panels for mobile phones.

Samsung’s Han Jong-hee told a local South Korean media outlet that Samsung does not plan to buy LG’s OLED panels for premium TV sets in April. Han earlier this month was promoted to vice chairman and chief executive officer of Samsung Electronics’ new entity called “device experience” division, which oversees businesses ranging from consumer electronic goods to mobile handsets.

Some observers doubt whether Samsung could immediately produce its premium flat screen TV production with white OLED panels, should Samsung and LG joins hands with one another for OLED TV sets.

Nam Dae-jong, an analyst at eBest Investment & Securities, said the production of white OLED flat screen TV sets will come as early as the second half of next year.

“If the negotiation regarding OLED TV is still underway, Samsung is unlikely to add the OLED TV to its TV set line-up in the first half of 2022″ he said.

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