November 22, 2024

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[ET NEWS] LG Display’s planned LCD supply to Samsung Electronics -- the first of its kind -- has been delayed for more than a year, according to industry sources who noted that the two rival firms may have not yet finalized the supply volume and price due to volatilities in the market.

Back in 2016 when Foxconn’s Sharp abruptly informed that it will be halting supplies to Samsung, the world’s largest TV maker sought help from other suppliers, including its crosstown rival LG Display. Amid LCD shortages globally, the two Korean firms agreed on the rare partnership that has been touted across industries here. 

After months of talks, LG supplied 40,000-50,000 LCD panels to Samsung for testing last year. The firm plans to supply about 1.52 million panels to the rival firm. Because they use different panel production technologies, Samsung has been adjusting its production process for the full adoption. But sources say the testing is taking too long.

“The final deal has not yet been signed. Not the testing, but other factors like supply volume and price seem to be the issues for the delay,” an industry source told ET News on condition of anonymity, saying Samsung had planned to use the LG panel for its 65- and 75-inch TVs from this year.

Over the past year, the market situation has drastically changed. Chinese panel makers expanded their production lines, while Samsung has also fast stabilized its supply chain. Now when the market faces an oversupply, high-priced LG panels may have become less attractive for Samsung.

According to market tracker WitsView, the price of 65-inch LCD panel fell 13-14 percent in the first quarter this year and another 14 to 16 percent decline is expected in the second quarter.

“The two firms may not call off the highly-publicized deal. They may instead compromise on detailed deal conditions so as not to hurt the original meaning,” the source added.

By Kwon Kun-ho and Bae Ok-jin
(wingh1@etnews.com) (withok@etnews.com)
This story was co-produced by ET News and The Investor.