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By Kim Yoo-chul
Samsung Electronics agreed with Hansol Chemical to use the latter's advanced cadmium-free quantum dot materials in its upcoming ultra high-definition televisions with quantum dots, executives at Samsung's local partner companies said Thursday.
The deal is a blow to Dow Chemical.
"Hansol Chemical has been named as the primary supplier for quantum dot materials to be used in Samsung premium TVs, pushing Dow Chemical into the secondary position," an executive at one Samsung supply chain partner in Korea said by telephone.
He said talks between Samsung Electronics and Dow Chemical failed as the two differed over licensing fees.
"Dow asked Samsung for too much for their quantum dot materials as Samsung intends to grow the quantum dot TV market with no huge price barrier to consumers," the source said.
DisplaySearch, a market research firm, said the basic cost of Samsung's 55-inch quantum dot TV was $584 compared to $380 for the same-sized TV without quantum dot technology.
An executive from another Samsung local partner said Hansol will supply cadmium-free quantum dot materials to the world's top TV producer using patents developed by Samsung Advanced Institute Technology.
"In all key businesses such as TVs and smartphones, Samsung attempts to realize a vertical integration between components and sets in order to save costs in sourcing key materials," said the executive.
Currently, Dow Chemical is the sole supplier for cadmium-free quantum dot materials to exclusively export its technology to almost all leading TV producers after it agreed with Nanoco for the license. That literally means Dow Chemical's materials are pricey.
A Samsung Electronics spokesman declined to comment on the issue, while representatives at Dow Chemical in Seoul were not available for comment.
Hansol Chemical is an affiliate of Hansol Group, founded by Lee In-hee, sister of Samsung Electronics Chairman Lee Kun-hee. Hansol was separated from Samsung Group and founded in 1991.
Shares of Hansol Chemical advanced 1.63 percent to end at 56,100 won Thursday on the main bourse.
Quantum dots are semiconductor nanocrystals, 10,000 times finer than a human hair, which can convert electrical energy into light and be manipulated to produce precise colors for display.
As quantum dots are cheaper and consume less power than organic light-emitting diode (OLED), Samsung is trying to promote quantum dot TVs as its next major product, while its chief local rival LG Electronics is embracing OLED TVs as its next TV variant.
Analysts say the agreement will negatively affect Dow's plan to ramp up its products at its plant in Korea, possibly hurting its cash revenues and profits.
On January, Dow Chemical declared that it had teamed up with LG Electronics to provide its cadmium-free quantum dot tech for LG's premium TV lines.
"LG Electronics still has no option to ask Dow Chemical to reduce the supplement costs. But the Samsung decision will help LG get an opportunity to ask Dow to renew licensing discussions for the materials," an LG official said.
