LG Display agreed to start supplying Samsung with liquid crystal display (LCD) panels and the two South Korean tech giants will allegedly start collaborating by July. Han Sang-beom, Chief Executive Officer at LG Display hinted at the new deal on Monday, The Investor reports. Han revealed that the two firms are still negotiating on the timeframe of their collaboration but said how it's reasonable to assume that LG Display can start providing Samsung with LCD panels in the early second half of 2017.
Samsung and LG Display have been negotiating an LCD supply deal since November, following Sharp's decision to stop supplying its rivals like Sony, Hisense, and naturally – Samsung. The possibility of a supply deal between two domestic rivals was unveiled in January when Samsung's TV business chief Kim Hyun-suk said that the Seoul-based tech giant is negotiating with LG over the matter. Sharp was supplying Samsung with approximately five million LCD panels on an annual basis, meaning that the Osaka-based display manufacturer was covering around 10 percent of Samsung's yearly TV production. Given how Samsung is planning to increase the production volume of its TVs in 2017, the fact that Sharp stopped supplying it with LCD panels is an even bigger issue for the company than it would have been last year.
Apart from LG Display, Samsung also turned to the Chinese BOE and the Taiwanese AUO, and both firms are expected to supply the South Korean tech giant with LCD panels in the coming years. Looking at the broader picture, Samsung is planning to transition its product portfolio from LCD panels in the long term as the company believes LCDs aren't profitable and is adamant to adjust its operations accordingly. Due to that state of affairs, the largest business conglomerate in South Korea recently started selling its LCD factories and reinvesting its resources into OLED operations. However, the company still isn't ready to completely drop LCD TVs which is why it's in need of a short-term supplier that will fill the gap in its supply chain. That state of affairs is what led Samsung to cooperate with LG, its fiercest domestic rival in numerous industries.