Samsung is reportedly buying OLED TV panels from LG

Lucifer ought to take the temperature of the underworld, because it seems like hell has just frozen over. According to Reuters, Samsung has inked a deal with LG to buy high-end white OLED (WOLED) TV panels from its long-standing rival. LG may start supplying the panels as soon as this quarter.

The plan, according to the report, is for LG Display to supply 2 million panels next year, then 3 million and 5 million respectively in 2025 and 2026. At least at the outset, the company will reportedly be making 77-inch and 83-inch WOLED panels for Samsung.

It's an unexpected partnership that may actually make a lot of sense for both sides. Samsung could use the panels to help it make up ground in the OLED TV market. The company has taken the approach that OLED displays are a better fit for smartphones and tablets than TVs. One reason for that perspective is that OLED panels are expensive — they tend to cost nearly five times more than LCD panels. On the TV front, Samsung has focused on making QLED models, which are cheaper than OLEDs.

Samsung has 6.1 percent of the OLED TV market, according to market research firm Omdia. LG Display's sibling LG Electronics is said to be out in front with a 54.6 percent market share while Sony has 26.1 percent. An LG Display deal could help Samsung overtake Sony in that realm or at least to better compete with Chinese manufacturers that are selling lower-cost LCD televisions.

Great deals on consumer electronics delivered straight to your inbox, curated by Engadget's editorial team. See latest

Please enter a valid email address

Please select a newsletter

By subscribing, you are agreeing to Engadget's Terms and Privacy Policy.

The reported deal could help LG Display to turn its business around after four straight quarters of losses. LG Display also makes smartphone screens for Apple, as well as OLED panels for Sony and LG Electronics. However, its OLED manufacturing facility hasn't been running at full capacity. That, according to Reuters, is due to a drop in demand for new TVs and a "limited customer base." Analysts suggest that the Samsung pact could help LG Display max out its manufacturing capacity and account for between 20 and 30 percent of production in the first year. The agreement could add north of $1.5 billion to LG's bottom line next year.

Vincent Teoh of HDTVTest suggested to Engadget that Samsung might have taken this path to resolve volume and screen size availability issues. "QD-OLED panel production from Samsung Display is still limited in quantity at the moment, and the motherglass has to be cut to cater for both monitors (e.g. 34-inch 240Hz QD-OLED gaming monitors which are greater in demand) and TVs (e.g. 55-inch QD-OLED TV).

"QD-OLED is also only available in 55-, 65- and 77-inch screen sizes at the moment, while the WOLED panels supplied by LG Display can go up to 83 and even 97 inches, or as small as 42 and 48 inches," Teoh said.