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Technology Stocks : OLED Universal Display Corp
OLED 112.50-1.7%3:59 PM EST

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From: Ravid.Ron6/20/2021 10:12:56 PM
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[Exclusive] Samsung Electronics finally joined hands with LGD... OLED panel annual supply contract of 3 million sheets

-Supply contract for 3 years from 2022 to 2024... Contract size expected to exceed 5 cents
- Faced with LGD in the face of threats from Chinese companies… Full-scale entry into the OLED TV market

Samsung Electronics will receive organic light emitting diode (OLED) panels from LG Display and enter the OLED TV market in earnest. As Chinese companies control the supply of liquid crystal display (LCD) panels and the prices continue to rise and LCD TV profitability gradually deteriorates, it is interpreted that they have joined hands with rival LG Display.

According to the financial investment industry and the display industry on the 21st, Samsung Electronics is planning to sign a contract with LG Display to supply 2 million to 3 million OLED panels per year from next year to 2024. It is known that as early as this week, Han Jong-hee, head of Samsung Electronics' video display (VD) business division, will make an announcement directly. According to market research firm Omdia last month, the average price of an OLED panel in the first quarter of this year based on a 55-inch general-purpose product is $510 (about 580,000 won). Taking this into consideration, a simple calculation would estimate the contract size to exceed 5 trillion won.

Accordingly, Samsung Electronics, which has not yet released an OLED TV, is expected to enter the market in earnest. While the OLED TV market is growing rapidly, it is determined that it will be difficult to keep pace with the market growth rate with the large OLED panel 'QD OLED' being developed by its subsidiary Samsung Display. Although there is a forecast that Samsung Display will mass-produce QD OLED within this year, it takes considerable time for yield stabilization in the initial stage of production. For this reason, it is predicted that it will be difficult to exceed 1 million shipments next year by only supplying itself.

Cooperation between Samsung Electronics and LG Display has been discussed several times in the past, but has been canceled due to various circumstances such as security. However, with the recent surge in LCD demand due to COVID-19 and Chinese companies such as BOE raising prices, it is no longer possible to guarantee profitability with LCD TV alone. In the OLED TV market, which is considered to be the future food of the future, some analysts say that the two companies have joined hands by winning over concerns that the future of the domestic display industry will be uncertain if they do not secure cost competitiveness from Chinese companies.

An industry official said, "As the price bargaining power with Chinese display companies is low, they are trying to change the plate to OLED while holding hands with LG Display, which is in competition with its subsidiaries." "In particular, the Chinese display industry is at a serious level for domestic companies. It seems that the two companies have decided to cooperate with each other for the protection and development of the domestic display ecosystem in the face of threats.”
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