Samsung launched new 83-inch OLED TVs in Korea last week using display panels from arch-rival LG, a first in the history of Korea's jealous chaebol, or family-owned conglomerates.
Top Samsung and second LG have historically used their own screens and made sure the specs are slightly different from their competitors, so customers have to stick with one or the other.
However, Samsung has broken this unspoken rule to avoid being overtaken by Chinese competitors in the slumping global TV market.
Samsung has been coyly silent about the use of LG Display panels and the new model, although it was already launched in the US in July and in Korea this month.
Japanese business daily Nihon Keizai Shimbun said the move was a tacit acknowledgment of the quality of rival products and "a similar admission of defeat in their technological rivalry".
Samsung seems to have found that its panel inventory is largely not up to scratch, leaving it with no choice but to use LG displays. Samsung's technological strength lies in small and medium-sized OLED panels used in smartphones, while LG excels in large panels for TVs.
Samsung Display has invested trillions in the production of quantum dot OLED screens since 2019, but it can only market 1.8 million panels per year, and the production cost is 1.5 times higher than LG Display's white or W-OLED screens. This means that Samsung ends up losing out on selling large TVs, while LG Display is essentially the only manufacturer in the world capable of producing large OLED panels at a bargain price.
The latest deal works both for Samsung, which can fill the panel shortage, and for LG, which will expand its customer base. LG Display can produce around 10 million large OLED panels a year, while global rivals' combined output capacity is less than 8 million, but the company has suffered five straight quarters of losses through the second quarter of this year.
One insider said: "Just as Sony and other Japanese display makers were overtaken by Korean and Taiwanese rivals in the past, Korea is now being chased by China. Samsung and LG share the painful experience of being overtaken by Chinese rivals in the global LCD market over the past decade and they seem to have come together to maintain their leadership in the OLED market.”
Chinese manufacturers now control more than half of the world's LCD panel market, so Samsung Display stopped making them, while LG Display decided to stop production for domestic consumption. Armed with massive government subsidies, Chinese rivals such as BOE and CSOT are also building sprawling OLED factories.
Chinese manufacturers are steadily increasing their share of the global TV market, leaving Samsung and LG with only one option to strengthen their grip on the premium OLED TV market.
In an unprecedented turn of events, bitter rivals Samsung and LG have put aside their long-standing rivalry and teamed up to counter the growing dominance of Chinese tech rivals. This strategic partnership marks a significant shift in the dynamics of the electronics industry, and its consequences are bound to be felt throughout the market.
Why Samsung and LG joined forces:
Samsung and LG, both South Korean electronics giants, have historically been fierce competitors in industries ranging from smartphones to home appliances. However, the rise of Chinese technology companies, armed with aggressive pricing strategies and rapid innovation, has posed a significant challenge to their market shares. Recognizing the need for a united front, Samsung and LG have decided to put aside their differences and work together.
Collaborative Innovation:
The unexpected alliance is expected to result in a joint effort to develop cutting-edge technologies that can compete with those offered by Chinese rivals. By combining their resources, research capabilities and technological expertise, Samsung and LG aim to accelerate innovation and enhance their product offerings to regain their competitive edge.
Market impact and consequences:
The joint venture between these industry giants is expected to have far-reaching implications for the electronics market. With Samsung and LG collaborating on R&D and manufacturing, they are likely to strengthen the competitive landscape against Chinese rivals. Consumers can expect to see an increase in advanced products, enhanced features and higher quality through this partnership.
Advantages over Chinese rivals:
Samsung and LG have decades of experience, global brand recognition and a history of producing high-quality products. By combining their strengths, they can leverage their reputations and regain customer trust and loyalty. The partnership also allows them to counter the pricing strategies used by their Chinese rivals as they focus on providing superior value rather than racing to the bottom.
Long term viability:
While the partnership is aimed at addressing the immediate threat from Chinese competitors, its long-term viability remains a matter of speculation. Collaboration will require effective communication, seamless integration of resources and a shared vision. Both companies must adapt to cooperation in areas where they traditionally compete, while protecting their individual interests.
The surprising collaboration between Samsung and LG signals a new chapter in the competitive landscape of the electronics industry. Joining forces against China's tech giants, these rivals are poised to reshape market dynamics, drive innovation and deliver greater value to consumers. As the partnership develops, industry observers and consumers alike will be watching closely to see how this bold move plays out in the ever-evolving world of technology.
In an unprecedented turn of events, bitter rivals Samsung and LG have put aside their long-standing rivalry and teamed up to counter the growing dominance of Chinese tech rivals. This strategic partnership marks a significant shift in the dynamics of the electronics industry, and its consequences are bound to be felt throughout the market.
Why Samsung and LG joined forces:
Samsung and LG, both South Korean electronics giants, have historically been fierce competitors in industries ranging from smartphones to home appliances. However, the rise of Chinese technology companies, armed with aggressive pricing strategies and rapid innovation, has posed a significant challenge to their market shares. Recognizing the need for a united front, Samsung and LG have decided to put aside their differences and work together.
Collaborative Innovation:
The unexpected alliance is expected to result in a joint effort to develop cutting-edge technologies that can compete with those offered by Chinese rivals. By combining their resources, research capabilities and technological expertise, Samsung and LG aim to accelerate innovation and enhance their product offerings to regain their competitive edge.
Market impact and consequences:
The joint venture between these industry giants is expected to have far-reaching implications for the electronics market. With Samsung and LG collaborating on R&D and manufacturing, they are likely to strengthen the competitive landscape against Chinese rivals. Consumers can expect to see an increase in advanced products, enhanced features and higher quality through this partnership.
Advantages over Chinese rivals:
Samsung and LG have decades of experience, global brand recognition and a history of producing high-quality products. By combining their strengths, they can leverage their reputations and regain customer trust and loyalty. The partnership also allows them to counter the pricing strategies used by their Chinese rivals as they focus on providing superior value rather than racing to the bottom.
Long term viability:
While the partnership is aimed at addressing the immediate threat from Chinese competitors, its long-term viability remains a matter of speculation. Collaboration will require effective communication, seamless integration of resources and a shared vision. Both companies must adapt to cooperation in areas where they traditionally compete, while protecting their individual interests.
The surprising collaboration between Samsung and LG signals a new chapter in the competitive landscape of the electronics industry. Joining forces against China's tech giants, these arch-rivals are poised to reshape market dynamics, drive innovation and deliver greater value to consumers. As the partnership develops, industry observers and consumers alike will be watching closely to see how this bold move plays out in the ever-evolving world of technology.
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