LG, Samsung to join hands on display business

The Samsung Group and the LG Group, Korea’s two bitter rivals in the global display-panel market, are to begin cooperating in areas such as the purchase of each other’s display panels and the sharing of patents, in order to counter challenges from tie-ups between Japanese and Taiwanese competitors.
The Commerce Ministry is making the cooperation possible in the latest demonstration of government intervention to maintain Korea’s competitive edge.
Two liquid crystal display rivals ― Samsung Electronics Co. and LG. Philips LCD Co. ― and two plasma display rivals ― Samsung SDI Co. and LG Electronics Inc. ― announced the formation of the Korea Display Industry Association yesterday to spur such cooperation.
According to the Commerce Ministry, the companies will conduct joint research and development projects and share patents that result from those projects.
The Samsung and LG units, which also produce television sets, also promised to break their long practice of not purchasing each other’s display panels for use in TV sets.
“Samsung and LG, which are old rivals, have never discussed such cooperation. So it is meaningful that they are promising to cooperate with the government’s help,” said Lee Hak-moo, an analyst at Mirae Asset Securities Co.
Samsung and LG will also make efforts to unify their product standards so that local equipment and parts suppliers can deal with both business groups, according to the ministry.
The government-led cooperation comes as Japanese and Taiwanese companies have begun to cooperate to beat Samsung and LG, which had a combined 33.6 percent share of the world’s LCD market and a 52.6 percent share of the PDP market last year. Sharp Corp. of Japan signed a cross-licensing agreement covering LCD patents with Chi Mei Optoelectronics Corp. of Taiwan in 2006.
In addition, the governments of those countries are making active moves to boost their display industry, with Tokyo leading the “Future Vision” project to develop next-generation displays and Taipei calling for mergers and acquisitions among display makers, said Jeong Dong-young of the Samsung Economic Research Institute.

By Moon So-young Staff Writer [symoon@joongang.co.kr]