Samsung WOLED this year? Some Say No…
We have noted the ongoing negotiations between OLED TV panel producer LG Display (LPL) and Samsung Electronics that have been the fodder for headlines citing “Signed, Sealed, & Delivered” to “Still Very Far Apart” over the last few months. As the days pass, it gets more difficult for Samsung to gain enough momentum to establish an OLED TV presence, with a Chinese firm indicating that it believes Samsung will not offer an OLED TV line this year, other than its own QD/OLED sets produced by affiliate Samsung Display (pvt).
Citing a number of factors the Chinese firm RUNTO has lowered its forecast for global OLED TV shipments from 10m units this year to between 7.9m and 8.1m, reducing its growth rate expectations from 53.8% to 23.0% based on 6.5m units shipped last year and also lowered its forecast for TV shipments overall from 219m to less than 210m units. With the negotiations still not final, and TV panel prices moving further in Samsung’s favor, it gets progressively harder for Samsung to avail itself of the ~4m total OLED sets it needs to represent 10% of its TV sales according to RUNTO. With expectations that Samsung Display will be able to produce between 750,000 and 1.4m QD/OLED units this year (We expect between 700,000 and 725,000 units – as per our 04-18-22 note) that would leave Samsung with the need for purchasing between 3m and 3.6m WOLED panels from LG Display this year to meet RUNTO’s 10% of total TV sales target.
With RUNTO’s 11m unit expectations for LG Display’s WOLED panel production and using the same percentages purchased by LG Electronics, Sony (SNE) and other customers last year, leaving ~1.5m units for Samsung to purchase. When added to the QD/OLED sets purchased from Samsung Display, the total of 2.25m to 3m units falls short of the 10% of TV sales RUNTO feels is necessary for Samsung to initiate an OLED line this year. Based on that conclusion, the war in Ukraine, the COVID outbreaks and lockdowns in China, and inflation, the company makes the assumption that Samsung will not purchase WOLED panels from LG Display this year.
Again, these are not our assumptions or numbers but we present the concept as a possible outcome (one of many) that are possible given the current circumstances surrounding the display business. While we do not agree with some of the estimates, not would we assume that unit volume share allocations would be identical to those made last year, the above is certainly possible, although such a decision by Samsung would put the introduction of the expected QD/OLED TV product in a different light. As part of an overall OLED TV strategy QD/OLED can be offered as the ‘top tier’ of OLED TVs, while on its own it is more of a curiosity than a full product line.
While we value the scenario noted above, we expect there are many more variables that play into the Samsung LG negotiations and delays have been working in Samsung’s favor. If Samsung can negotiate a long-term unit volume based contract with LGD at a lower price than late last year, it would serve them well over the next few years, and if that means postponing the full OLED line this year, we expect Samsung’s TV marketing department will find another hook to attract customers during the holiday season. Regardless, it is interesting to hear what is in our mind a more radical view of the situation, rather than the daily “We know the answer” headlines that tend to appear after an influencer speaks with a low level supplier...
Citing a number of factors the Chinese firm RUNTO has lowered its forecast for global OLED TV shipments from 10m units this year to between 7.9m and 8.1m, reducing its growth rate expectations from 53.8% to 23.0% based on 6.5m units shipped last year and also lowered its forecast for TV shipments overall from 219m to less than 210m units. With the negotiations still not final, and TV panel prices moving further in Samsung’s favor, it gets progressively harder for Samsung to avail itself of the ~4m total OLED sets it needs to represent 10% of its TV sales according to RUNTO. With expectations that Samsung Display will be able to produce between 750,000 and 1.4m QD/OLED units this year (We expect between 700,000 and 725,000 units – as per our 04-18-22 note) that would leave Samsung with the need for purchasing between 3m and 3.6m WOLED panels from LG Display this year to meet RUNTO’s 10% of total TV sales target.
With RUNTO’s 11m unit expectations for LG Display’s WOLED panel production and using the same percentages purchased by LG Electronics, Sony (SNE) and other customers last year, leaving ~1.5m units for Samsung to purchase. When added to the QD/OLED sets purchased from Samsung Display, the total of 2.25m to 3m units falls short of the 10% of TV sales RUNTO feels is necessary for Samsung to initiate an OLED line this year. Based on that conclusion, the war in Ukraine, the COVID outbreaks and lockdowns in China, and inflation, the company makes the assumption that Samsung will not purchase WOLED panels from LG Display this year.
Again, these are not our assumptions or numbers but we present the concept as a possible outcome (one of many) that are possible given the current circumstances surrounding the display business. While we do not agree with some of the estimates, not would we assume that unit volume share allocations would be identical to those made last year, the above is certainly possible, although such a decision by Samsung would put the introduction of the expected QD/OLED TV product in a different light. As part of an overall OLED TV strategy QD/OLED can be offered as the ‘top tier’ of OLED TVs, while on its own it is more of a curiosity than a full product line.
While we value the scenario noted above, we expect there are many more variables that play into the Samsung LG negotiations and delays have been working in Samsung’s favor. If Samsung can negotiate a long-term unit volume based contract with LGD at a lower price than late last year, it would serve them well over the next few years, and if that means postponing the full OLED line this year, we expect Samsung’s TV marketing department will find another hook to attract customers during the holiday season. Regardless, it is interesting to hear what is in our mind a more radical view of the situation, rather than the daily “We know the answer” headlines that tend to appear after an influencer speaks with a low level supplier...
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