Samsung Elec to enhance tie with LG at expense of BOE

Samsung Electronics Co., the world’s largest TV maker, is set to reduce the procurement of panels from BOE Technology Group Co., the global liquid-crystal display (LCD) leader, for a potential cut in their business tie amid legal battles while stepping up cooperation with its South Korean rival LG Display Co.Samsung Electronics considered gradually cutting purchases of displays from BOE for an eventual stop, according to industry sources in Seoul on Monday. The Chinese company currently supplies Samsung Electronics with LCDs for TVs and smartphones.The South Korean tech giant plans to buy more of the panels from other suppliers such as LG, China Star Optoelectronics Technology Co., Japan’s Sharp Corp. and Taiwan’s AUO Corp., the sources said.Samsung Electronics, which manufactures about 50 million TVs a year, has already been in talks with those companies for more purchases, according to the sources. The company is poised to increase the procurements of LCDs from LG, which supplies organic light-emitting diodes (OLEDs). Samsung Electronics has South Korea’s largest display maker as a subsidiary – Samsung Display Co.“Samsung (Electronics) is unlikely to face any issues in its supply chain as it has many LCD suppliers,” said one of the sources, adding the move is expected to hurt BOE, which generates 10-20% of sales from the South Korean electronics behemoth.The company procured 10.9% of its LCD panels for TVs from BOE, 28.4% from CSOT, 25% from China’s HKC Corp., 9.9% from AUO, 8.7% from Taiwan’s Innolux Corp., 8% from LG and 7.8% from Sharp in the first quarter, according to market research firm Omdia.LEGAL BATTLES OVER PATENTSThe move came as legal battles over patents between Samsung Electronics and BOE intensified.In May, BOE filed patent infringement lawsuits against Samsung Display and its Chinese unit, as well as Samsung Electronics’ operation in the mainland to a court in Chongqing.The leading Chinese display maker said Samsung Display has used its OLED technology without permission and Samsung Electronics sold smartphones equipped with the subsidiary’s OLEDs, which infringed on patents, damaging BOE’s profit.Samsung Display struck back, taking its first legal action against BOE over alleged patent infringement for OLED screens of Apple’s iPhone 12 with a lawsuit to the Texas Eastern District Court in June.“A technology theft is not us but BOE,” said Samsung Group officials.The Samsung companies have been preparing for a lawsuit against BOE before the Chinese company’s litigation, seeing its five display patents having been infringed, according to industry sources in Seoul.BOE was known to have filed the lawsuit to expand its market share and take the lead in the global OLED industry, according to industry sources in Seoul.Samsung Display was the dominant player with a market share of 47% in the world’s OLED shipments in the first quarter, followed by BOE with a 21% share and LG with 11%, according to market research firm Display Supply Chain Consultants. BOE took the throne of the global LCD market with the strong support of Beijing in 2021, causing Samsung Display and LG to focus on the OLED business, which the Chinese company currently aims to rule.By Ik-Hwan [email protected] Jongwoo Cheon edited this article.