UPDATED. 2022-08-12 11:04 (금)
Samsung and LG Display can’t agree on TV OLED panel price
Samsung and LG Display can’t agree on TV OLED panel price
  • Gijong Lee
  • 승인 2022.01.03 10:23
  • 댓글 0
이 기사를 공유합니다

Parties negotiations tense over unit price
LG Display offering panels at a cheaper rate than its supply to LG Electronics
Samsung demanding further discounts 
Image: LG Display
Image: LG Display

Samsung Electronics and LG Display’s negotiations over the price of TV OLED panels that the latter will supply are hitting a snag due to the parties failing to agree on an appropriate unit price, TheElec has learned.

According to sources, LG Display has offered to supply the panels at a price lower than the one it gives to affiliate LG Electronics. But Samsung Electronics is requesting further price cuts. The pair has so far failed to reach a final agreement, the sources said.

LG Electronics is offering OLED panels for a 65-inch TV at mid-US$600. This is around 10% cheaper than US$750 LG Display sells the same panel to LG Electronics.

But Samsung is demanding a price between late-US$500 to early-US$600, or around a hundred dollars lower than that offered by LG Display.

Sources said LG Display is finding Samsung’s request hard to accept.

For Samsung, buying the panels cheaper by US$150 will allow it to reduce the sales price of its 65-inch OLED TV by US$450. Currently, LG Electronics sells its 65-inch OLED TV for around US$1,800 to US$2,800 at Bestbuy in the US.

Meanwhile, during the negotiations, Samsung also told LG Display that it wants to procure their entry-level TV OLED panels, which they already supply to LG Electronics, as well.

LG Display grades its TV OLED panels by three levels: R, P and M. LG Electronics procures all three tiers and has a wide range of OLED TVs. Sony, which also buys OLED panels from LG Display, usually only buys the highest tier ones, and offers OLED TVs as a premium product.

Sources said Samsung wants the entry-level OLED panels as well to lower the sales prices of its TVs.

It is already planning to offer its Neo QLED TV as its highest consumer premium TV in 2022. Neo QLED TV is a liquid crystal display (LCD) TV with MiniLED backlighting.

Therefore, it wants OLED TVs, which will be positioned below Neo QLED TV, to be offered at a cheaper price range than Neo QLED TV, while at the same time making sure they are still profitable.

As Samsung is expected to buy in bulk of up to around 2 million units of OLED panels, it is using this buying power to pressure LG Display to cut unit prices.

Additionally, Samsung is the world’s largest TV vendor, which makes them an alluring customer for panel makers like LG Display.

However, LG Display is yet to mark an annual profit from its TV OLED panel business. 

Its performance this year, which showed growth compared to 2020, was mostly down the LCD sales.

However, LCD prices have been going down again during the second half of 2021 after they spiked during the early stages of the COVID-19 pandemic.

LG Display needs new profits to offset this decline, making Samsung an attractive customer.

Also, having Samsung push OLED TV will be beneficial for LG Display as it may cause the TV market to shift towards OLED TV from LCD TV at a faster pace.

Meanwhile, the pair’s negotiations will also impact the price of Samsung Display’s Quantum Dot (QD)-OLED panels.

If Samsung succeeds in procuring OLED panels from LG Display, which uses White OLED technology, at the price it wants, it can pressure Samsung Display to offer its QD-OLED panels at a similar price or at least demand discounts.
 


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