LG Display reaches LCD panel supply pact with Samsung

Supply deal: A man walks past Samsung Electronics Co SUHD televisions displayed at the company’s D’light flagship store in Seoul. LG will supply as many as 3 million LCD panels to Samsung this year. – Bloomberg

Agreement between the two will be first for the long-time rivals

SEOUL: LG Display Co has scored a deal to supply television displays to rival Samsung Electronics Co from as soon as this year, people with direct knowledge of the matter said.

LG Display, a major supplier of panels to Apple Inc, will replace a venture between Sharp Corp and Foxconn Technology Group as a supplier to the world’s biggest TV maker, said the people, who asked not to be identified because details of their agreement haven’t been released.

LG Display and Samsung reiterated comments from earlier this month that they are in talks on LCD supply without elaborating.

A supply agreement between LG Display and Samsung would be a first for the longtime South Korean rivals who have never used each others panels before.

Sakai Display Products Corp, controlled by Sharp and Foxconn, has cut back supply of LCD screens to other TV makers, a move that may foster a panel supply shortage and further accelerate a rally in display prices.

The Sakai venture provided as many as 4 million large TV panels annually to Samsung and is increasing display sales to Chinese manufacturers, the people said.

LG will supply as many as 3 million LCD panels to Samsung this year, one of the people said.

Sharp and Foxconn, whose main listed unit is Hon Hai Precision Industry Co, are now considering expanding production in the US and getting ready to expand Sharp’s brand abroad. Sharp declined to comment.

Samsung Display Co, which is controlled by the TV maker, has been cutting back output of the older LCD technology to instead focus on next-generation screens using organic light emitting diode or OLED technology for mobile phones and tablets.

Samsung has held talks to supply OLED to Apple for iPhones, people familiar with the matter have said.

LG Display – a fierce rival to Samsung – stands to become the biggest beneficiary as TV customers demand bigger-sized LCD screens.

Sharp’s decision to stop LCD supply has triggered a dispute.

Samsung has asked for court arbitration in New York against the Osaka-based company and two others as it seeks US$429mil in compensation. – Bloomberg

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