According to Reuters, Samsung has signed a contract to purchase LG’s OLED TV panels. LG Display will reportedly supply Samsung with high-end 77-inch and 83-inch OLED panels. The deal will help LG gain profits amid fierce competition in the LCD panel market from Chinese companies.

This is the first time Samsung has bought OLED panels from its South Korean rival after years of rumors of similar deals. It’s also an admission of its own miscalculation after Samsung stopped making OLED TVs in 2015, citing the high cost of the panels and the market’s lack of readiness for such high-end TVs. Samsung has been promoting its cheaper and lower-quality QLED TVs (a type of LED LCD), but OLED models have dominated the premium market. Samsung recently returned to OLED, releasing its first QD-OLED TV last year.

According to informed sources, LG Display will sell 2 million OLED panels to Samsung in 2024. In 2025, this indicator will increase to 3 million, and in 2026 – to 5 million panels.

To date, LG has captured more than 50% of the OLED TV market, Sony – 26%, and Samsung – only 6%. Although Samsung has dominated the global TV market for 17 consecutive years, it faces stiff competition from Chinese manufacturers with cheaper LCD TVs. The company now sees an opportunity for (previously lost) high profits with large OLED TVs.

This deal should benefit both LG and Samsung. In its recent financial quarterly report, LG Display acknowledged “sluggish demand” for TVs and lower-than-expected sales of OLED panels. At the same time, things are not going well at Samsung Electronics either. The company endured another terrible quarter due to lower demand for semiconductors and reduced production of memory chips. As a result of this agreement, both companies hope to improve their financial performance.

Source: The Verge