According to South Korean media reports, an electronic report from the Financial Regulatory Authority of South Korea shows that Samsung Electronics Co., Ltd. added BOE as one of the three major display panel suppliers in the consumer electronics (CE) field in 2021, and the other two suppliers are CSOT and AU Optoelectronics.
Samsung used to be the world’s largest LCD panel maker, but in recent years, domestic companies such as BOE and CSOT have rapidly expanded their market share. Samsung and LG have been losing the field, making BOE surpass LGD to become the world’s largest LCD panel maker in 2018.
Samsung had originally planned to stop producing LCD panels by the end of 2020, but over the past year, the LCD panel market was going up again, which made Samsung’s LCD factory open for another two years with plans to retire at the end of 2022.
But the LCD panel market has changed since the end of last year, and prices have been falling. In January, the average 32-inch panel cost just $38, down 64% from January last year. It also brought forward Samsung’s planned exit from LCD panel production by half a year. The production will be discontinued in June this year. Samsung Display, owned by Samsung Electronics co. Ltd will shift to higher-end QD quantum dot panels, and LCD panels that Samsung Electronics needs will be mainly procured.
In order to speed up the transition to next-generation QD-OLED panels, Samsung Display decided in early 2021 to stop producing large LCD panels from 2022. In March 2021, Samsung suspended L7 production line at asan Campus in South Chungcheong Province, which produced large LCD panels. In April 2021, they sold the 8th generation LCD production line in Suzhou, China.
The industry insiders said Samsung Display’s withdrawaled from the LCD business has weakened Samsung Electronics’ bargaining power in negotiations with Chinese manufacturers. In order to strengthen its bargaining power, Samsung electronics is increasing its procurement with AU Optronics and Innolux in Taiwan, but this is not a long term solution.
Samsung Electronics’ TV panel prices have nearly doubled in the past year. Samsung Electronics reported that it spent 10.5823 billion won on display panels in 2021, up 94.2 percent from 5.4483 billion won in the previous year. Samsung explained that the main factor behind the increase is the price of LCD panels, which rose about 39 percent year-on-year in 2021.
To work out this dilemma, Samsung has accelerated its shift to OLED-based TVS. The report said Samsung Electronics is in talks with Samsung Display and LG Display for the release of OLED TVS. LG Display currently produces 10 million TV panels a year, while Samsung Display started mass production of large OLED panels in late 2021.
The industry sources said Chinese panel makers are also developing large OLED panel technology, but have not yet reached the mass production stage.
Post time: Mar-14-2022