Samsung, LG LCD Panel Partnership Suffers Delay

Samsung Electronics and LG Electronics formed a partnership after Foxconn’s Sharp halted its LCD supplies to the Galaxy S9 maker two years ago. However, the first ever partnership between the crosstown rivals appears to be experiencing a problem.

The Investor learned from industry sources earlier this week that LG Display’s planned LCD supply to Samsung has been delayed for more than a year. The reason cited is the fact that the two companies have yet to finalize the specifics in their deal. Sources said LG and Samsung have yet to reach a final decision on supply volume and price because of the volatilities in the present market.

Last year, LG supplied 40,000 to 50,000 LCD panels to Samsung for testing. The testing phase was necessary because the two companies do not use the same LCD production technology. Samsung is doing some adjustments on its production process for the full adoption of LG’s LCD panels. LG Display has since revealed that it plans to supply around 1.52 million panels to Samsung.

“The final deal has not yet been signed,” an industry source said. “Not the testing, but other factors like supply volume and price seem to be the issues for the delay.” While these factors have yet to be finalized, Samsung and LG have already agreed that the panels the latter is producing for the former will be used for the 65-inch and 75-inch TVs that Samsung is releasing this year.

Another source familiar with the discussions between Samsung and LG but refused to be named said, “The two firms may not call off the highly-publicized deal. They may instead compromise on detailed deal conditions so as not to hurt the original meaning.”

IBTimes reported last November that Samsung tapped LG for the supply of LCD panels for its upcoming TV models. The surprising partnership was formed after Sharp, which is already owned by Taiwanese company Foxconn, decided to abruptly cut its LCD panel supplies to Samsung in 2016 in favor of its own TV production.

Because of its need for LCD panel supplies, Samsung began talks with LG over a possible partnership. The two took sometime to reach an agreement, however, because their rivalry got in the way. The difference in their display manufacturing technologies also contributed to the delay in their team-up.