OLED materials makers set to shine as Samsung, Sony unveil new TVs

South Korea’s major OLED materials makers are becoming the market darlings with decent gains in their share prices, as global TV manufacturers such as Samsung Electronics Co. and Sony Corp. are embracing new technology for high-end devices.

LX Semicon Co., which supplies display driver IC (DDI) chips, to LG Display Co., rose 5.2% to close at 138,000 won on Monday. The stock has risen 22% over the past month, compared with the broader Kospi market’s 0.8% decline.

Over the one-month period, Duksan Neolux Co, a Korean OLED materials maker, has advanced 7.2%, while Innox Advanced Materials Co. has gained 8.2% and P&H Tech Co. has risen 17%.

The decent performances of those shares were propelled by the increasing adoption of OLED panels in various electronic gadgets from smartphones to TVs, tablet PCs and even electric vehicles.

OLED, short for organic light-emitting diode, is highlighted by self-illuminating pixels that do not require a separate light source, allowing manufacturers to produce lightweight, thin and flexible display products, thus appealing to high-end consumers.

SAMSUNG, SONY TO LAUNCH QD-OLED TVs

Last Friday, Samsung, the world’s largest TV vendor, said it is taking preorders for its first quantum dot or QD-OLED TVs to be sold globally, starting with the North American and European markets.

Samsung is launching 65- and 55-inch 4K QD-OLED TVs with QD-OLED panels supplied by affiliate Samsung Display Co., which showcased the next-generation panels at CES 2022 in January.

Samsung Display said its QD-OLED panel should deliver superior color accuracy at high brightness levels, offering even better viewing angles than regular OLED displays.

Japan’s Sony also announced earlier this year that it is launching its own TVs using the Samsung QD-OLED display in June.

Samsung and its crosstown rival LG Electronics Inc. have been leading the global TV market with strong sales of their premium and large-screen models targeting high-end consumers.

LG is the world’s largest manufacturer of OLED TVs with a market share of over 60%, although Samsung is the dominant player in the overall TV market.

While unveiling its fourth-quarter results in January, LG Display Co., which supplies panels to LG Electronics, forecast its global panel shipments to rise to 10 million units this year from 7.45 million units in 2021.

Apple Inc. also plans to use OLED panels in its iPad series from the first half of 2024.

Korea Investment & Securities picked Duksan Neolux, Innox Advanced Materials and Hansol Chemical Co. as the brokerage firm’s favorites to benefit from the growing adoption of OLED panels by Samsung, Sony and other technology companies.

Analysts said LX Semicon is among the undervalued OLED-related shares.

According to market tracker FnGuide, the market consensus for LX Semicon’s 2022 operating profit is 393.3 billion won ($324 million), up from the market’s estimate of 376.5 billion won just three months ago.

POSSIBLE SAMSUNG-LG ALLIANCE IN OLED

Another positive factor that can boost OLED materials companies is a potential business partnership between Samsung and LG.

Asked at CES 2022 if Samsung is willing to buy OLED panels from rival LG Display to increase TV production volumes, Samsung Vice Chairman and Co-CEO Han Jong-hee said the company is open to "every possibility."

According to HI Investment & Securities, Samsung sells over 40 million TVs globally, while its affiliate Samsung Display only produces 1.3 million OD-OLED panels annually.

“It’s inevitable for Samsung to secure high-end panels from its rival LG to keep its market leadership,” said HI Investment analyst Chung Won-suk.

Write to Hyung-gyo Seo at seogyo@hankyung.com
In-Soo Nam edited this article.