 |
| Samsung Display's Asan production plant / Courtesy of Samsung Display |
Growing chance of LG supplying OLED panels to Samsung
By Kim Bo-eun
Samsung is set to launch its quantum-dot organic light-emitting diode (QD-OLED) TV at CES 2022, but questions are mounting as to whether it will be able to meet market demand for new TVs as its display affiliate has a limited production capacity.
Samsung Display held a ceremony marking the launch of QD-OLED panel production at its Asan plant, Tuesday. The plant's Q1 Line, which had previously produced liquid crystal display (LCD) panels, has been switched to manufacture QD-OLED panels after Samsung reduced its production of LCDs, which had lost cost-competitiveness to Chinese display makers.
QD-OLED is a hybrid technology that combines quantum dots and OLED panels, which Samsung says enables brighter and broader color expression, deeper blacks, a faster response and wider viewing angles. In October 2019, Samsung Display stated it would invest 13 trillion won into QD-OLED panels by 2025, with plans to launch mass production in 2021.
Analysts said Samsung Display's investment enables it to manufacture 180,000 panels a month, which equates to around 2.16 million panels annually, given a production yield of 100 percent.
But the Samsung affiliate has yet to significantly improve its production yield, which is currently in the early phase of panel production. Samsung's QD-OLED production yield (defect rate) is known to be around 50 percent. This would bring down annual production to 1 million. Samsung Electronics plans to introduce the QD-OLED TV in January, which would then hit stores in March.
Visual Display Business President Han Jong-hee, who will deliver a keynote speech at the upcoming Las Vegas technology fair, is set to introduce Samsung's latest TV.
One million panels produced on an annual basis falls largely short of Samsung's usual annual production targets for a new TV, given its No. 1 status in the global market.
Samsung Display is on track to start mass production this year, to enable sales of Samsung's QD-OLED TVs to begin in March, according to sources, but it will only be able to offer a limited supply of its newest TV.
OLED panel sourcing from LG
Analysts referred to the possibility of the world's largest TV manufacturer sourcing some OLED panels from LG Display to make up for the shortage in QD-OLED panels. Samsung is already sourcing some liquid crystal display (LCD) panels from LG and it is considering purchasing more large-sized LCDs from LG's display affiliate. That means LG Display is already included in Samsung's supply chain management (SCM).
"The possibility is rising for Samsung to employ OLED display panels until it secures mass production capabilities and price competitiveness for its QD-OLED display," a Kiwoom Securities report said, recently.
One industry source said Samsung Electronics may decide to manufacture a sub-brand TV that incorporates LG's OLED display panels, because Samsung Display still has to improve production yield.
LG Display is currently the only display maker in the global market that can guarantee volume production, on-time delivery and better pricing based on its enhanced production yields. Its factory in Paju near the inter-Korean border is playing a central role in producing large-sized OLEDs.
Samsung cannot manufacture QD-OLED TVs with LG Display's White OLED panels, due to differing panel structures. It can, however, choose in the meantime to launch a TV with LG's OLED panels to make up for the shortage in QD-OLED TV supply, according to sources and analysts.
Samsung denied such a possibility. The company's Visual Display Business President stated last year that Samsung does not plan to produce OLED TVs. He meant that the company was not going to make TVs incorporating its rival LG's White OLED panel widely in use. Samsung has contended that LG's OLED panel is "inferior in quality."
Additionally, Samsung's entry into the large OLED TV market is set to benefit local display makers and electronics manufacturers.
"The OLED TV market is still in its early stages, given it is a premium TV that was launched only a few years ago. It will be better to have more players in the market so that the size grows," another industry official said.
