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Samsung turns to LG Display for LCDs? +4

08:57 15-Dec-16


Multiple sites are reporting that Sharp will stop supplying Samsung with LCD panels in 2017 and that Samsung has turned to LG Display, amongst others, to replace the supply.  Although there is no agreement yet, LGD supplying rival Samsung would be unprecedented, even though it's the move that probably makes the most sense.  The 5M panels represent almost 10% of Samsung's output and the shortage is likely to increase panel prices, which would be a significant boost for LGD no matter how things work out.

Also of note is more reorganization at LG Display, in order to focus on the OLED business.  The conflicting opportunities mean that AUO could stand to benefit from the Samsung supply shortage as well.  Both stocks are chronically undervalued, but have traded upwards along with record market index highs, so I see this as a minor or buy-the-dips opportunity, rather than a game changer.