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        Samsung Electronics Chooses Micro LED from Sanan Optoelectronics Over Its Own Micro LED

        Feb 11, 2018

        Samsung Electronics is planning to commercialize micro LED TV by working a biggest LED company in China. Micro LED TV is a next-generation TV that has its pixels composed of ultra-small LEDs. Fact that Samsung Electronics, which is the number one TV manufacturer in the world and has its own LED business, is choosing Chinese company’s technologies over its LED technologies is drawing heads from other industries. China, which has been playing so-called ‘chicken game’ in LED markets, has also emerged as the ‘number one threat’ in micro LED markets as well.
        According to industries on the 11th, Samsung Electronics recently made a strategic partnership with Sanan Optoelectronics and it decided to purchase micro LEDs produced by Sanan first. Sanan Optoelectronics and Samsung Electronics have maintained an exclusive relationship for three years as it was the only company to supply micro LEDs to Samsung Electronics. Samsung Electronics also promised to pay advance payment of $17.0 million (18.4 billion KRW) to Sanan Optoelectronics.
        Samsung Electronics made this partnership with micro LED TV in its mind. Micro LED TV is a TV that has its pixels (smallest unit that composes a display) composed of ultra-small LED and it is excellent in brightness, contrast range, and color representation ability without needing backlights or color filters. However, it needs many LEDs. About 2,600 LED chips are needed just to make a 4K-resolution TV. Their interests agreed with each other from an aspect that Samsung Electronics was looking to secure large scale of LEDs and Sanan Optoelectronics was looking to secure a stable customer. Although Sanan Optoelectronics is a normal business, it is the biggest LED chip manufacturer in China.
        Fact that Samsung Electronics is joining hands with a Chinese company is drawing heads from other industries. Samsung Electronics is manufacturing its own LED chips and packages through its LED Business Team. Despite manufacturing its own LEDs, Samsung Electronics’ business department that oversees TVs made a strategic partnership with Sanan Optoelectronics. It can be seen it made such move as Sanan’s competitive edge in LED surpasses Samsung Electronics’ competitive edge.

        Samsung Electronics Chooses Micro LED from Sanan Optoelectronics Over Its Own Micro LED

        Samsung Electronics selected LED as one of five new businesses in 2010 and it has been promoting its LED business on full-scale. It has been very active in LED business as it commercialized its own sapphire ingot and finished products. However, global LED markets went into a ‘game of chicken’ due to oversupply and cheap Chinese products, Samsung’s LED business was restructured as it started to make losses. It seems that loss of continuous competitive edge was the ultimate cause for Samsung Electronics to lose an opportunity in a new market called ‘micro LED’.
        On the other hand, Chinese businesses that have grown with support from Chinese Government and others have prepared stepping stones to grab upper hands even in micro LED markets.
        Samsung Electronics is the biggest TV manufacturer in the world and it is looking to promote micro LED TV as its next-generation strategic product. Actually, it started large display business using LEDs and it is working on micro LED TVs for homes. It is estimated number of demands for LEDs will continue to increase greatly in the future. It is worrisome that Chinese LED businesses, which are already giving hard time on South Korean LED industries, will become an even bigger threat in the future.
        “It is heard that Sanan Optoelectronics ordered 150 MOCVD (Metal-Organic Chemical Vapour Deposition) equipment, which are equipment necessary for manufacturing LEDs, at the end of last year for its partnership with Samsung Electronics.” said a representative for a South Korean LED business. “There is not a business in South Korea that can make such a large-scale investment.”
        According to a market research company called Markets&Markets, it is estimated that size of micro LED markets will grow by 54.7% annually on average from $250 million in 2017 to $19.92 billion in 2025.
        “We made a partnership with Sanan Optoelectronics to commercialize micro LED.” said Samsung Electronics. “However, we are also looking to work with other companies as well when necessary.”
        Staff Reporter Yun, Keonil | benyun@etnews.com

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