Samsung Electronics is reportedly negotiating with LG Display over a supply deal for LCD panels, the company's executive revealed on Wednesday. While speaking to Yonhap at this year's CES, the chief of Samsung's TV business Kim Hyun-suk said that the two South Korean companies are currently in serious talks over the matter. Kim said he couldn't disclose any further details about this potential collaboration because none have been agreed so far. Samsung has yet to respond to requests for comments on this report while LG's representatives declined to comment, adding how the company has a policy of not commenting on rumors related to both their existing and potential clients.
This new information gives credence to a December report according to which Samsung may soon be on the lookout for another LCD supplier as its long-term partners Sharp and Hon Hai Precision Industry are planning to drop it as a client. The two companies recently invested in Sakai Display Products, a Japanese LCD joint venture whose representatives revealed they're planning to stop supplying Samsung with LCD displays at some point in 2017. The move was interpreted as an attempt to challenge Samsung in the TV market, but many industry experts were still skeptical about Sakai Display Products' bold decision to drop its biggest client who reportedly bought millions of LCD panels from the company in 2016 alone.
Samsung's potential supply deal with LG Display would set a notable precedent seeing how the Seoul-based tech giant is directly competing with LG Electronics in the TV market. In 2016, Samsung allegedly procured enough LCD panels from Sakai Display Products and Sharp to produce over 10% of its global LCD TV output, so any potential supply agreement the company agrees to with LG Display is bound to be a massive one. However, even if Samsung and LG manage to come to an agreement, their collaboration isn't likely to last long as Samsung is reportedly planning an exit strategy for LCDs which it doesn't see as profitable in the long term. This train of thought is what led to Samsung selling numerous LCD factories last year as the company is currently in the process of focusing its production efforts on OLED panels.