[NEWS ANALYSIS] Samsung's going into OLED TV business, sources say

LG Electronics' organic light emitting diode (OLED) panels are displayed at CES 2019. [YONHAP]

Samsung Electronics, the world’s largest television maker, is set to enter the organic light emitting diode (OLED) television market as its panel-making affiliate, Samsung Display, started mass-producing big OLED screens.

The tech giant’s previous strategy was to distance itself from that particular high-end TV segment, which is dominated by LG Electronics.

Samsung Electronics has yet to announce its move, but industry insiders and analysts say it's happening.

“Samsung Electronics will introduce OLED TV models as early as next year,” said a source with knowledge of the matter.

“As a primary supplier of TV panels for Samsung Electronics, Samsung Display would not have gone into mass production of OLED panels unless Samsung Electronics showed interest in adopting them,” said the source, who spoke on condition of anonymity since she was not authorized to speak to the media.

Samsung Electronics announced during a third quarter conference call in October that its display affiliate would begin mass-producing OLED TV screens in the fourth quarter. Samsung Display is 84.78 percent owned by Samsung Electronics.

Multiple local media outlets speculated that the electronics maker will debut OLED lines at the CES 2022 trade show in Las Vegas next month, although Samsung Electronics declined to comment.

The OLED panels produced by Samsung Display – dubbed QD Display - deploy a blue OLED layer as a light source and a color filter consisting of quantum dots to enhance luminance.

Samsung Display claims that the blue light source is capable of producing more vivid colors than LG Display’s OLED panels, which use white OLED layers.

One question is whether Samsung Electronics will use LG Display’s panels in the beginning stages of its production of OLED TVs, given that it may take some time for Samsung Display to increase yield rates and ramp up production capacity of its own.

Chung Won-suk, an analyst at Hi Investment & Securities, projects that Samsung Electronics will source from both Samsung Display and LG Display next year to produce OLED screens for TVs.

“In the display industry, it has become an open secret that Samsung Electronics will use LG Display’s White OLED panels along with Samsung Display’s,” the analyst said.

Another source in the display industry claimed that discussions between Samsung Electronics and LG Display “made too much progress for the process to be reversed.”

Samsung Display’s manufacturing capacity for QD Displays at this point is relatively low at 30,000 OLED sheets per month.

That capacity will likely remain the same through 2025, according to UB Industry Research, a display-focused market researcher based in Seoul, since the display affiliate takes a cautious approach to additional investment before it is assured of demand in the market.
“Samsung Display won’t take the risk of expanding too aggressively in a market in which demand for [QD Display] is uncertain,” said Yi Choong-hoon, head of UB Industry Research during an online conference last month.

Chung predicted that LG Display will supply OLED panels that could turn into 2 million units of TV sets for Samsung Electronics next year.

The speculation of possible cooperation between the big rivals surfaced earlier this year.

Still, Han Jong-hee, head of Samsung Electronics’ visual display division, rejected in April the possibility that Samsung is interested in deploying LG Display’s organic light-emitting diode (OLED) panels.

He admitted, however, that the company is examining samples of Samsung Display’s QD Display to check its performance.

The OLED TV market is booming as prices fall. The picture quality is better than liquid crystal display (LCD)-based TVs, which is what Samsung makes.

Sales of OLED TVs jumped 88 percent in the third quarter compared to the same period last year, according to market tracker Display Supply Chain Consultants.

BY PARK EUN-JEE, KIM TAE-YOON [park.eunjee@joongang.co.kr]