Rumors of Samsung/LG OLED Deal
While not the first time such a deal has been mentioned, the Korea Times has posted a story suggesting that Samsung Electronics (005930.KS) is close to ordering between 3m and 4m OLED display panels from LG Display (LPL), although a Samsung executive is quoted as saying nothing has been decided at this moment, and after a report that the two had met a few months back to discuss such an agreement, Samsung has denied that the meeting took place. Samsung’s display affiliate, Samsung Display (pvt) has been developing a quantum dot/OLED display production process, for which it has been sampling what are likely pre-production level panels to both its parent and other potential customers, but no date has been given as to when SDC will go into full scale production and such panels will appear.
That said, Samsung Display is converting its L7-2 LCD fab into a Gen 6 OLED line and is planning the conversion of its L8-1 LCD line into a Gen 8.5 OLED line, which would be used for monitor and notebook OLED panels, and would be the only Samsung Gen 8.5 OED production line. Gen 8.5/8.6 lines however are not particularly efficient above 55” so the odds that Samsung would choose a Gen 8.5 fab configuration and produce large OLED panels (>55”) seems odd, and producing monitor and notebook panels on such a line makes more sense.
But the real question is why Samsung would choose to add OLED to its mid-priced TV line, using WOLED technology (White OLED with Color Filter) when it has repeatedly trashed the concept? While the Samsung Electronics marketing organization can surely find a way to company-speak around that problem, the only reason would be to capture premium where such premium does not exist, and Samsung seems to already have staked out quantum dots and a combination of QDs and mini-LEDs for its high-end lines. This leaves mid-priced TV sets, which would be straight LCD or QD/LCD as the most competitive point in the Samsung TV line, and Samsung having to buy much of its LCD display product from other producers does not give it any pricing leverage.
Adding a mid-range OLED line would give the company a bit of potential margin improvement, but again they would have a cost disadvantage to LG Electronics (066570.KS), the parent of LG Display and if such a deal were to occur, the delivery timeline would be spread out over a number of quarters, unless LG Display was willing to dedicate some of its large panel capacity to Samsung, knowing that they could abandon the WOLED concept if SDC is successful in developing the QD/OLED product. It all seems a bit implausible, but stranger things have happened in the display space.
That said, Samsung Display is converting its L7-2 LCD fab into a Gen 6 OLED line and is planning the conversion of its L8-1 LCD line into a Gen 8.5 OLED line, which would be used for monitor and notebook OLED panels, and would be the only Samsung Gen 8.5 OED production line. Gen 8.5/8.6 lines however are not particularly efficient above 55” so the odds that Samsung would choose a Gen 8.5 fab configuration and produce large OLED panels (>55”) seems odd, and producing monitor and notebook panels on such a line makes more sense.
But the real question is why Samsung would choose to add OLED to its mid-priced TV line, using WOLED technology (White OLED with Color Filter) when it has repeatedly trashed the concept? While the Samsung Electronics marketing organization can surely find a way to company-speak around that problem, the only reason would be to capture premium where such premium does not exist, and Samsung seems to already have staked out quantum dots and a combination of QDs and mini-LEDs for its high-end lines. This leaves mid-priced TV sets, which would be straight LCD or QD/LCD as the most competitive point in the Samsung TV line, and Samsung having to buy much of its LCD display product from other producers does not give it any pricing leverage.
Adding a mid-range OLED line would give the company a bit of potential margin improvement, but again they would have a cost disadvantage to LG Electronics (066570.KS), the parent of LG Display and if such a deal were to occur, the delivery timeline would be spread out over a number of quarters, unless LG Display was willing to dedicate some of its large panel capacity to Samsung, knowing that they could abandon the WOLED concept if SDC is successful in developing the QD/OLED product. It all seems a bit implausible, but stranger things have happened in the display space.
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