Sleeping with the enemy

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Sleeping with the enemy

Samsung and LG have joined hands for the first time in years.
The two companies agreed to buy liquid-crystal display panels from each other and cooperate in developing a mobile television standard for North America.
Samsung Electronics is going to buy 37-inch modules from LG Display, and LG Electronics will purchase 52-inch modules from Samsung Electronics.
Up until now, the two companies have imported from Taiwanese manufacturers television panels they don’t make themselves or that they are short of.
With the two cooperating, Korea’s prospects of becoming No. 1 in the global display market are growing brighter.
The world electronics market is almost like a war zone.
At the end of last year, Japan’s Sony slashed the prices of its LCD TV sets, and the battle began.
With the quality of TV sets becoming similar, there seems to be no other choice to attract more customers but to reduce prices.
So, electronics companies are uniting for survival.
Recently, TSMC, Powerchip Semiconductor and Vanguard International Semiconductor, all based in Taiwan, announced a joint investment plan worth 10 trillion won ($9.6 billion).
Sony had a joint venture with Samsung and later also decided to cooperate with Sharp to build an LCD manufacturing factory for 4.4 trillion won.
Under such circumstances, the collaboration of two old rivals, Samsung and LG,seems very realistic and wise.
As the world has entered a digital age, companies have had to deal with increasing competition to keep their heads above water.
A number of electronics companies went bankrupt because their astronomical investments turned out to be a failure.
In contrast, companies that succeeded in procuring components at low prices from around the world made advances. Those who refuse to change their old ways cannot hope to stay in business.
We hope that the collaboration between Samsung and LG promotes teamwork among local companies. They should not fight over the small local market, missing out on growth opportunities because of old rivalries.
In the current era, adaptable genes dominate, not simply strong ones. That is why we need to pursue the flexible strategy of sleeping with the enemy.

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