‘Bravia 8,’ Sony’s OLED (organic light-emitting diode) TV brand. Sony
Korean display makers have effectively taken over the panel supply chain for premium organic light-emitting diode (OLED) televisions made by Sony, the storied Japanese TV brand. Samsung Display’s quantum dot (QD)-OLED goes into the top-end models while LG Display’s (034220) white (W)OLED goes into mid-tier sets, cementing a structure in which Samsung and LG divide Sony’s OLED TV panel supply between them.
Analysts say the supply chain for core components is being reshaped around Korean display makers as Japanese TV manufacturers have largely retreated from in-house production of large panels and from volume competition in the low- and mid-price segments, concentrating instead on the high-end market.
Sony uses panels from both LG Display and Samsung Display in its OLED TV products, according to industry sources on the 7th. Samsung Display’s QD-OLED is used in the premium Bravia 8 II model, while LG Display’s WOLED goes into the mid-tier OLED lineup. Because Sony has a broader OLED TV lineup than other Japanese TV makers such as Sharp, it sources panels from the two companies depending on the characteristics of each product.
QD-OLED converts blue OLED light into red and green using quantum dot materials, producing sharper colors. WOLED renders individual colors from white light generated by OLED and has an advantage in producing panels in a wide range of sizes. Sony therefore uses QD-OLED for its top-end products and WOLED for models spanning a wider variety of screen sizes.
This supply structure is tied to shifts in Japan’s TV industry. Rather than competing on large shipment volumes like Samsung Electronics (005930) or China’s TCL and Hisense, Sony is concentrating on the high-end TV market, where it leads with picture quality and brand strength.
Samsung Electronics ranked first in the global TV market in the first quarter with a 17% share by shipments, according to market research firm Counterpoint Research. China’s TCL and Hisense followed with 14% and 13%, respectively, while LG Electronics (066570) held 9%.
By contrast, major Japanese TV makers including Sony, Sharp and Panasonic each hold less than 1% of the global market. These companies are sustaining their businesses mainly in Japan’s domestic market and in some markets such as Southeast Asia. Their shipment-based share is low because they run lineups centered on high-margin premium products rather than selling large volumes of low- and mid-priced LCD (liquid crystal display) sets as Chinese rivals do.
LG Display’s supply of large OLED panels to Japanese TV makers is also connected to this market structure. Because shipments of OLED TVs by Sony and Sharp are not large, the volume commitment is not a heavy burden for LG Display either, analysts said.
The industry expects the standing of Korean OLED makers within the supply chain to grow further as Japanese TV makers focus on premium products rather than competing on sales volume.
“Japanese TV makers are concentrating on high-value-added products that lead with brand and picture quality rather than increasing sales volumes of low- and mid-priced products,” an industry official said. “It is a structure in which dependence on LG Display and Samsung Display, which can reliably supply large OLED panels, is bound to rise.”