Samsung Electronics is reportedly planning to strengthen its partnership with LG Display, saying it will increase the number of LCD panels it buys from LG Display in 2022, with orders expected to increase fivefold to nearly 1 trillion won.
In response, KB Securities, a South Korean brokerage, pointed out in a recent report that for both sides, strengthening the partnership should be mutually beneficial and expected to produce synergies in the long run.
On the one hand, Samsung electronics should be able to reduce its dependence on Chinese LCD panel makers (currently 70 percent) and improve its bargaining power with them. LG Display, on the other hand, can further diversify its customer base and deepen its reliance on LCD panels from the world's three biggest TV makers: Samsung Electronics Co., LG Electronics Co. and SONY Corp.
Meanwhile, Samsung Electronics' OLED TV launch creates an opportunity for the two sides to expand their cooperation into OLED.
LG Display, which dominates the large-size OLED panel market, is expected to produce 11 million OLED TV panels by the end of 2022, 10 to 15 times more than Samsung Display QD OLED panels.
Given this relatively limited capacity, Samsung may have to turn to LG Display for supplies, the report said. In addition, Samsung Electronics' entry into the OLED TV market could accelerate the penetration of OLED TVS and the expansion of the related ecosystem.
