Samsung is reportedly in discussions with rival LG Display in a bid to buy LCD panels. The former company is seeking to buy the panels from the latter, according to industry insiders. Samsung is also in talks with China Star Optoelectronics Technology, BOE Technology Group, and Sharp Corp, the reports indicate. But it hasn't managed to strike a deal with any of those companies just yet.
Samsung's decision to take its time on any deals pertaining to LCD panels isn't entirely surprising either. Analysts have reportedly valued a potential deal between Samsung and LG at over $833 million. While that doesn't represent even half of one percent of Samsung's yearly revenue, it is a sizable figure.
Why is Samsung looking to buy LCD panels from LG?
As to the reason behind Samsung's alleged move, the decision isn't altogether surprising either. The company will soon cease production on LCD displays altogether. That comes as part of Samsung's shift toward QLED panels.
Short for Quantum Dot LED, QLED is a variation on LCD panels that effectively adds a quantum dot film between layers. That, in turn, allows a higher brightness and contrast. The response time of QLED isn't as good compared to OLED panels. But the displays are also more affordable. That's helped drive the popularization of televisions made with the technology.
As part of that move, Samsung will reportedly cease all production on LCD panels by the end of the year. But that doesn't mean it wants to stop selling LCD-based technologies. It just means that Samsung is downsizing its own operations on that front in anticipation of killing them off entirely at some point in the future.
It also makes some sense for LG Display to be the partner-of-choice here too. Although the companies are rivals, LG has pulled Samsung out of the fire in the past on display technology. Most notably, LG came in to supply displays to Samsung after Sharp stopped supplying them back in 2017.
Diminishing returns are driving this
Ultimately, Samsung's decision to move away from LCD panels is the result of diminishing returns. Its return-on-investment for LCD displays has dropped substantially over the past several years. And, in fact, their demise has been a long time coming. Samsung first started formulating its exit from the market back in 2016.