By Kim Yoo-chul
Staff Reporter
LG Display, the world's second-biggest supplier of liquid crystal displays (LCD) panels, Wednesday signed a partnership deal with Nasdaq-listed Cree to secure supply of light emitting diode (LED) chips for its flat-screen devices.
LG Display will expand the share of panels featuring LED-backlighting to 50 percent of its total notebook LCD output, spokeswoman Jacquelyn Park said.
"Although we will receive technological support from the U.S. company for LED packaging, LG Display also plans to internalize LED-related technologies," Park said.
The partnership was signed in early January.
Park, however, declined to comment on further financial details such as the deal size and contract periods.
Cree is leading the LED lighting moves and setting the stage to make incandescent light bulbs obsolete through the use of the eco-friendly lighting. It has a number of LED-related patents.
The deal has resulted in a mixed response for the shares of LG Display and its sister company LG Innotek.
Shares of LG Display soared 9.16 percent to end at 26,800 won on the nation's main bourse, while that of LG Innotek just added 0.39 percent to close at 51,100 won.
The two companies once discussed a plan similar to the Cree partnership. But the alliance was scrapped due to the pressure of investment, profitability and unstable module supply by LG Innotek.
"Truly, that's good news for LG Display, however, that's bad news for LG Innotek," said an analyst at Woori Investment & Securities.
Since 2002, LEDs have been developed rapidly because of their wide application in mobile phones.
With the improvement of LED luminescence efficiency, LED has got rid of the reliance on the mobile phone industry and has now entered the semiconductor lighting era.
Although the global consumer electronics industry is in "defensive mode" due to slowing demand for electronics products hit by the bad economy, "Green IT" is growing in importance, especially in the area of energy-saving electronic consumer products.
LED chips are an energy-efficient, environmentally friendly alternative to current cold cathode fluorescent light (CCFL) backlights.
Thanks to the advantages, LCD monitors are shifting to LED backlight technology, which will drive costs down because it contributes 40 percent of the total cost, reducing energy consumption and extending battery life, as well.
According to data from the Topology Research Institute of Taiwan, a research firm tracking the IT market, some 30 percent of notebook computers will have LED backlight modules in 2009, which will translate into two billion LEDs to be shipped to notebook computer makers worldwide this year.
Big players in notebook computers such as Dell, Acer and Apple have also vowed to introduce LED-type notebook computers.
Samsung Electronics has also been engaged in detailed talks with Samsung Electro-Mechanics to set up an LED joint venture to jump into the market.