LG Display Said to Reach LCD Panel Supply Pact With Samsung

LG Display Said to Reach LCD Panel Supply Pact With Samsung

LG Display has scored a deal to supply television displays to rival Samsung from as soon as this year, according to Bloomberg. LG Display will replace a venture between Sharp and Foxconn as a supplier to the world’s biggest TV maker, said the people, who asked not to be identified because details of their agreement haven’t been released. LG Display and Samsung reiterated comments from earlier this month that they are in talks on LCD supply without elaborating.

A supply agreement between two companies would be a first for the longtime South Korean rivals who have never used each others panels before. Sakai Display, controlled by Sharp and Foxconn, has cut back supply of LCD screens to other TV makers, a move that may foster a panel supply shortage and further accelerate a rally in display prices. Supply may remain tight well into next year, benefiting LG Display and other panel makers.

The Sakai venture provided as many as 4 million large TV panels annually to Samsung and is increasing display sales to Chinese manufacturers. LG will supply as many as 3 million LCD panels to Samsung this year, one of the people said. Sharp and Foxconn, whose main listed unit is  Hon Hai, are now considering expanding production in the U.S. and getting ready to expand Sharp’s brand abroad. Sharp declined to comment.

Samsung Display, which is controlled by the TV maker, has been cutting back output of the older LCD technology to instead focus on next-generation screens using organic light emitting diode or OLED technology for mobile phones and tablets. Samsung has held talks to supply OLED to Apple for iPhones, people familiar with the matter have said. LG Display, a fierce rival to Samsung, stands to become the biggest beneficiary as TV customers demand bigger-sized LCD screens.