Samsung is pushing Chinese display maker BOE out of its LCD TV panel supply chain. The company has lowered orders from the Chinese supplier while increasing overall orders this year. It is reportedly distancing away from BOE after a breakdown in talks over royalties.
BOE loses LCD TV panel orders from Samsung
BOE has been one of Samsung’s key suppliers of LCD panels for TVs. It enjoyed a lot of exposure from this partnership as the Korean firm is the world’s largest TV maker. BOE leveraged Samsung’s global presence and used its name for marketing purposes. The latter expectedly wants the former to pay royalties for using its image.
The two companies have been in talks regarding the royalty structure since early this year. But they couldn’t reach an agreement. It’s unclear if they couldn’t work out a structure or if BOE refused to pay royalties altogether. Either way, Samsung is now retaliating by pushing BOE out of its supply chain.
According to research firm Omdia, Samsung is decreasing BOE’s share in its LCD TV lineup to about 13 percent this year, from 17 percent last year (via The Elec). This is at a time when the company is increasing the overall orders by almost 13 percent, from 47.8 million units last year to 53.8 million. BOE’s loss means huge gains for other Samsung suppliers, including CSOT, HKC, Sharp, and LG Display.
CSOT remains the biggest supplier of Samsung’s LCD TV panels, with its share increasing from 20 percent to 21 percent. HKC leapfrogged BOE in second place after a huge swing in order share, from 15 percent to 20 percent.
It is worth mentioning here that BOE was recently caught making unauthorized changes to display specifications for Apple’s iPhone 14 series. The Chinese firm had received orders for 30 million OLED displays for the iPhone 14 and iPhone 14 Pro Max. But it was struggling with low yield and quietly changed the specifications of the display without Apple’s knowledge.
However, the changes didn’t go unnoticed by Apple, which immediately ordered BOE to halt production. The company may now source the screens for the entire iPhone 14 lineup from Samsung Display and LG Display.
Samsung Display’s share in Samsung’s LCD TVs is decreasing
BOE isn’t the only one losing orders for LCD TV panels from Samsung. The Korean company’s sister firm Samsung Display seeing a drop in orders, from 6.9 million units last year to 4.3 million this year. But this decline is due to an altogether different reason. Samsung Display is scaling down its TV LCD business and gradually moving to QD-OLED panels. It plans to entirely stop LCD production going forward.