A man walks out of the headquarters of LG Display in Seoul, October 20, 2011. (Reuters-Yonhap)
LG Display, which has been suffering operating losses in recent months, could turn a profit next year if it starts supplying OLED panels to Samsung Electronics as early as this quarter, an analyst report said Wednesday.
“LG Display is expected to supply 77-inch, 83-inch OLED panels to Samsung Electronics from the second half of this year, and add 55-inch and 65-inch panels to the deal,” Kim Dong-won, an analyst at KB Investment and Securities, said in the report.
“The deal would play as a catalyst for LG to raise the operation rate of its OLED manufacturing line.”
The display maker has been running its OLED factory below full capacity, and the reported deal with Samsung would help LG turn a profit next year, Kim said. He also forecast LG would make an operating profit of 83.2 billion won ($62.1 million) next year.
A Reuters report the same day said LG Display aims to supply 2 million OLED panels to Samsung next year and boost shipments to 3 million and 5 million units in subsequent years.
While the crosstown rivals had previously failed to reach an agreement on supply contracts in 2021, their envisioned “alliance” is likely to help them gain a competitive edge in the market.
Samsung Electronics is committed to fostering its nascent OLED TV business, as its heavy reliance on Chinese display makers for the LCD panels has put pressure on cost.
LG Display would benefit as it has hemorrhaged losses for two consecutive years. The company reported a net loss of 2.09 trillion won for the October-December period last year.
Samsung has a 6.1 percent share in the OLED TV market, behind Sony’s 26.1 percent, according to market tracker Omdia. LG Electronics leads the market with 54.6 percent.
The display market is expected to grow about 6 percent to $11.7 billion this year, and reach $12.9 billion by 2027, the market tracker said.
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