LG Electronics is in talks with BOE on buying smartphone OLED panels from the Chinese display maker, according to industry sources on July 1. This means there’s a good chance that the new smartphones from LG next year would be fitted with BOE’s OLED screens.
For LG Display, this isn’t good news because it’s not the first time it fell behind BOE, which replaced it as the first vendor for OLED panels to China’s Huawei Technologies. Now, it’s about to lose its edge in the captive market as well.
In the LCD market, LG Display has already lost a lot of ground to BOE and Tianma Micro-Electronics.
LGE’s mobile communication unit has been increasingly turning towards Chinese suppliers on a cost-cutting campaign driven by Kwon Bong-suk who took the helm as of the end of last year. Efforts include plans to move the smartphone production lines to Vietnam.
“LG Electronics is also placing orders in small amounts to keep inventory low,” said one industry watcher on the condition of anonymity. “That’s why there was recently a temporary supply shortage for the V50 ThinQ.”
As such, LG Electronics is unable to keep partnering with LG Display, which is struggling for footing in the small and mid-sized OLED panel market.
"LG Display may be a sister firm, but it’s really quite simply each man for himself,” said another market watcher, adding that the smartphone business is suffering as much as displays.
For its high-end V50 ThinQ smartphone featuring dual screens, LGE used LG Display’s OLED panels for the main display, but the optional displays were supplied by Tianma. With the deal, the Chinese company jumped to the global No.1 in terms of market share in LTPS LCDs for the first time after defeating Japan’s JDI.
Until now, up to 30 percent of LG Display’s smartphone displays were supplied to LG Electronics. But in the first quarter of this year, it fell to below 20 percent. According to market research firm IHS Markit, Apple is now accounting for 85percent of LG Display’s smartphone display shipments.
But this is not because Apple was asking for more supplies, noted market watchers. It’s because aside from the California-based tech company and LG Electronics, LG Display has lost many of its deals.
In the first quarter of last year, Apple had accounted for 57 percent, followed by LG Electronics with 22 percent and Huawei with 13 percent.
In hand with the trend, LG Display has been increasingly shipping less. In the first quarter, it shipped 12 million smartphone panels, which was about 34 percent less than the same period last year.