By Kate Yuan

(JW Insights) Sep 5 -- Samsung Electronics paid KRW1.9521 trillion($1.47 billion) to Chinese companies in the first half of this year to purchase LCD panels for TVs and monitors, according to Financial Supervisory Service’s electronic disclosure system of South Korea on September 2, BusinessKorea reported.

Most of these panels were produced by companies including CSOT (华星光电), AUO (友达光电), and BOE (京东方).

Samsung’s LCD panel purchase cost in the first half of this year was 46.7 percent lower than KRW3.6657 trillion($2.77 billion) in the same period of 2022. However, analysts say that its cost was actually similar to the cost in the same period of 2022 or even increased considering that the dropping prices of LCD panels and a decline in demand for LCDs for TVs.

Samsung Electronics’ reliance on Chinese panel makers increased, especially as Samsung Display, which produced LCD panels until the first half of last year, has been scratched off from the list of major suppliers this year.

Samsung Display has stopped producing LCDs since June last year. This was due to the declining profitability of its LCD business with a drop in unit costs of LCD panels and the need to select and focus on next-generation displays. In the past, Samsung Electronics purchased about 30 percent of the LCD panels it needed from Samsung Display and the rest from CSOT, AUO, and BOE.

Samsung’s astronomical spending on purchases of LCD panels from Chinese companies has a lot to do with the composition of its flagship products. The Korean TV giant is still focusing on QLED TVs, a type of LCD TVs, even as a transition to OLED TVs accelerates in the TV market, said the BusinessKorea report.