Report: LG & Huawei To Form A Long-Term OLED Partnership

According to a recent report from South Korea citing unnamed industry sources, CEOs of LG Display and Huawei will attend a top management meeting on October 3 in order to lay down the plans for a long-term collaboration on small and mid-sized OLED (organic light-emitting diode) panels. The need for this collaboration has apparently been partly fueled by Samsung Display’s inability to meet the high demand for OLED panels in China, which prompted Huawei to follow a two-way strategy and secure both South Korean tech giants as its main OLED suppliers.

Recent reports suggest that the possible collaboration between LG Display and Huawei should not only secure a stable supply chain for the Chinese smartphone maker but should also help in establishing a mutual growth strategy for both companies in the future. Next year, LG Display is said to supply Huawei with two to three million small to mid-sized OLED panels which will be manufactured at its E2 and E5 plants in Paju, but the company intends on increasing its OLED manufacturing capacity at its E5 and E6 plants as well. The transaction is supposedly worth between 200 and 300 billion won, which translates to between $176 and $265 million, and the amount of panels required from LG Display by Huawei will increase as the OEM continues to adopt OLED technology in more smartphone models moving forward.

The report also suggests that Samsung Display is currently experiencing difficulties with supplying OLED panels to its own smartphone branch as well as its largest client Apple and due to the company’s “clear supply priority,” some Chinese OEMs have had issues with receiving their OLED modules in time, according to industry sources cited by BusinessKorea. In any case, Huawei is expected to continue collaborating with Samsung Display, and the company’s upcoming Mate 10 smartphone will apparently be equipped with non-flexible OLED panels manufactured by LG’s closest competitor. Judging by recent developments, Huawei intends on adopting OLED technology for more smartphones next year, indicating that the demand for LCD smartphone panels could continue to decline, assuming that the increasingly high demand for OLED panels can be met by the industry’s biggest players, including LG and Samsung.

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