 Howard Stringer |
LG Display, the world’s No. 2 manufacturer of flat screens, is looking to partner with Tokyo-based Sony as the latter mulls breaking up its strategic relationship with Samsung to cut costs.
LG is planning its advanced, brighter OLED screens at better prices, sources familiar with the matter told The Korea Times, Monday.
``LG Display has keen interest to sell its OLED screens to the Japanese TV maker. The deal, if realized, is going to give a helping hand to client-strapped LG, which is suffering operating losses,’’ said an industry executive, requesting anonymity.
For flat-screen makers, securing many big set-makers as clients is crucial for
 Kwon Young-soo |
But those are not good enough as Samsung has been leading the global TV market, followed by Sony.
``One good sign is that LG Display is shipping more displays to Sony," said another industry executive, asking not to be identified.
LG sold over 700,000 screens for Sony televisions during the third quarter of this year, up from 340,000 in the second, officials and data from market research firms showed.
In the first quarter of 2011, Sony bought some 450,000 LG screens for its 32-inch and 37-inch television sets, they said.
LG’s sales to Sony in the second quarter were 6.8 percent of the latter’s total demand, up from 3.1 percent in the fourth quarter of 2010. Samsung’s supply to Sony during April to June this year declined to 55.1 percent of demand from 64.6, according to the sources.
A Sony spokesman in Tokyo wasn’t available for comment.
Sony is looking to reach an agreement within this year to end its contract with Samsung. Sony runs a 50:50 LCD joint venture with Samsung in the provincial city of Tangjeong.
``LG’s entire LCD sales to Sony will increase to 10 percent of demand by the end of this year. Sony is desperate to foster outsourcing to save procurement costs and overcome rapidly deteriorating prices hit by a continued global oversupply,’’ said a source directly involved with the matter.
OLED deal
Analysts say LG is likely to sign a contract with Sony for ultra-thin, next-generation OLED displays in the wake of the fragile Samsung-Sony partnership.
LG has recently decided that it will launch super-size, organically-powered OLED panels and is going to introduce a 55-inch OLED-equipped flat-screen TV in 2012.
LG Display chief executive Kwon Young-soo believes that its IPS technology is better suited for mobile devices such as tablets and smartphones, which is a worry to its rival Samsung which uses OLED displays in its Galaxy variants.
``LG is interested in a partnership with Sony, which plans to expand outsourcing of even OLED panels and we will approach the firm sometime next year,’’ said the source.
OLED panels are more expensive than the current LCD panels as they don’t use backlights. But television majors are migrating to OLED-equipped TVs to find their next revenue source.
Samsung plans to exhibit a 55-inch OLED TV in the upcoming International Consumer Electronics Show (ICES) in Las Vegas in January next year, and it will heavily promote them ahead of the London Olympics the same year.
Although LG CEO Kwon publicized the talks with Sony to sell his firm’s film patterned retarder (FPR) 3D screens early this year, LG has yet to do so, according to officials.
Chief financial officer Jeong Ho-young said the company will release a large-sized OLED panel late next year and investment decisions will follow after analyzing the market response.
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