BOE Proposes OLED Joint Venture with Samsung and LG

China’s biggest display manufacturer, BOE, has proposed establishing an OLED joint venture business with LG Display and Samsung Display, reported The Korea Times.

OLEDs are considered next-generation displays, unlike LCDs they do not require bulky backlights, hence making the displays thinner and brighter. BOE has invested more in OLEDs for a bigger market share in the growing market.

According to a source quoted by the report, an affiliate of BOE has contacted several Korean component suppliers and proposed setting up an OLED display joint venture in China. BOE is targeting LG Display and Samsung Display as key partners for the venture.

The Chinese company promised those Korean suppliers, they would guarantee sales of their products in China.

"We are seriously considering accepting BOE's business offer given the company's guaranteed incentive to boost the sale of our products," an executive at one of LG Display's Korean partners approached by the Chinese firm said.

The Chinese market remains an important regional market for Korean display makers including BOE have continued increasing their spending on displays, helping Korean suppliers earn more.

Weak demand for consumer gadgets has made LG Display and Samsung Display reluctant to raise display investments including OLEDs, said officials and experts.

The LG executive added BOE is also considering to approach Japanese OLED suppliers as its plan B.

China is a key market for Korean display component suppliers as major Chinese display companies including BOE continually raise spending on displays, and support Korean suppliers revenue growth.

Analysts and officials noted that if key Samsung and LG display partners joins BOE’s OLED joint venture, there could be technology leakage, since Korean companies are ahead of Chinese counterparts in the OLED sector.

OLED displays are mostly applied in small mobile devices, such as Samsung’s Galaxy smartphones, though the panels adaptation rates in profitable large-sized panels is still low.

"China aims to increase the country's presence in OLEDs by offering huge incentives and subsidies,” said one industry official. “If BOE ties up with key Korean partners in OLEDs, then BOE will get more support from Beijing and this will negatively impact on Korea's current lead in the business segment.”

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