Samsung and LG, two South Korean conglomerates known for home appliances, have joined forces to produce high-end TVs. LG Display recently signed a deal to supply millions of its white-OLED displays to Samsung Electronics for five years starting this year, according to industry insiders on Feb. 13. Samsung will use LG’s OLED displays to make premium TVs.
This unlikely partnership comes as the two conglomerates seek to fend off competition from low-cost TV manufacturers in China.
LG has been a key player in the home appliance sector since it was founded in 1958 as GoldStar Corporation. Samsung entered the fray in 1969 when it founded Samsung Electronics, marking the beginning of a rivalry that spanned over five decades.
The two conglomerates are now opting for cooperation over competition to fortify their position in the global market. The so-called “TV alliance” is the brainchild of Samsung Group chairman Lee Jae-yong and LG Group chairman Koo Kwang-mo, according to people familiar with the matter. “Samsung and LG have teamed up to expand the premium TV segment in the face of China’s low-cost TV offensive,” said an industry insider.
Samsung had initially favored quantum dot light-emitting diodes, or QLEDs, for its high-end TV panels. But the market preferred OLEDs, which LG specializes in, and Samsung missed out on OLED TV sales due to its delayed entry into the segment. As Chinese low-cost LCD TVs began to threaten Samsung’s position as the world’s top TV manufacturer, chairman Lee reportedly decided to focus on high-end OLED TVs.
In return, LG Electronics agreed to use Samsung Display’s OLEDs in LG laptops. Industry insiders suggest that under the leadership of the two chairmen, Samsung and LG may extend their cooperation into areas such as semiconductors, chemicals and materials. A senior executive, speaking on condition of anonymity, said that the chairmen of South Korea’s four major conglomerates - Samsung, LG, Hyundai and SK - are leaning towards partnerships that will elevate their position in the global market. “It helps that the chairmen maintain close relationships with each other,” he added.
Samsung is also strengthening partnerships with Hyundai Motor Group, a longstanding rival in the automotive sector. Hyundai Motor installed Samsung subsidiary Harman’s audio system in its Genesis G80 electric vehicle (EV) in 2021. In October last year, Hyundai signed a deal to use Samsung SDI’s EV batteries in its next-generation EVs. Hyundai will also use Samsung’s Exynos Auto V920 semiconductor system starting in 2025.
This change is notable, considering Hyundai had previously only used LG and SK batteries in its EVs. “Hyundai previously maintained such tight control over its supply chain that it avoided using anything related to Samsung, even office supplies,” said a source with knowledge of the matter. The recent shift in strategy can be attributed to Hyundai chairman Chung Euisun, who expressed a strong will to cooperate with rivals.
Hyundai’s collaborative efforts extend beyond Samsung - the carmaker is also partnering with LG and SK. With LG Energy Solutions, Hyundai will build joint-venture battery plants in Indonesia and the U.S.. Hyundai’s 2024 Genesis GV80 is equipped with LG’s in-vehicle infotainment system.
The carmaker is also building a joint-venture battery plant in the U.S. with SK on, and is collaborating with SK E&S to supply hydrogen buses in Seoul.
“In the past, the four conglomerates thrived by competing with each other in the domestic market, but now Korean companies collectively face fierce global competition,” said an industry insider. “With protectionist policies such as the IRA in the U.S. and carbon taxes in Europe on the rise, the companies have realized that they need to work together as a team to gain ground in the global market.”