Samsung Electronics shifts LCD supplies from own unit to Chinese makers

[THE INVESTOR] Samsung Electronics is shifting liquid-crystal display purchases from its own display-making unit Samsung Display to Chinese makers for cost benefits.

According to a recent report by TrendForce, the world’s largest TV maker is adjusting its panel supply sources as it prepares for the peak shipment season of the third quarter. 

Samsung has already cut orders from Samsung Display, purchasing more panels from Chinese and Taiwanese panel suppliers.

This year, Korean TV makers will secure 43.7 percent of panel purchases on its home turf, down from 50.5 percent in 2015. Samsung’s cutting orders to its sister firm is mainly responsible for the decreased share of domestic purchases.

Their purchases of Japanese panels are projected to remain at just 3.4 percent.

Considering Samsung plans to suspend another LCD plant at the end of this year, Samsung and LG will likely allocate a greater share of their orders to Taiwanese and Chinese panel suppliers.

With Samsung reducing LCD productions, its compatriot rival LG Display is expected to enjoy a boom, supplying more TV panels to Japanese brands.

TrendForce predicted orders from Japanese brands could make up 26.4 percent of LG’s panel sales.

The research firm said shipments of LCD TV sets worldwide are project to reach 219 million units this year, a slight growth of about 1.5 percent from last year. Korean brands will make up 77 million units.

By Lee Ji-yoon (jylee@heraldcorp.com)