Two top leaders in Korean IT industry and two bitter rivals in the global display battlefield, Samsung and LG, have finally joined forces to challenge the market.
Two liquid crystal display panel makers -- Samsung Electronics and LG Philips LCD -- and two plasma display panel (PDP) makers -- Samsung SDI and LG Electronics -- Monday launched the Korea Display Industry Association.
The companies pledged to cooperate in various fields, ranging from patents and joint research and development to cross-purchasing of panels from each other.
The firms will consider lifting a ban on parts suppliers providing some products to their local rivals and will try to standardise panels, equipment and materials.
The panel giants have reached an agreement to proceed with a small-to-large joint development strategy for the display industry through the project of 'Eight Win-Win Partnership' centered on 'Patent Cooperation', 'Breaking of Vertical Integration' and 'Joint R&D'.
Korea's Commerce and Industry Minister Kim Young-Ju said the alliance should not be seen as setting the stage for collusion or price fixing.
'The companies are not seeking mergers or a cartel to fix prices,' Kim told a meeting of anti-trust regulators.
He said South Korea should ease tight anti-trust rules to help local firms compete with foreign rivals through strategic tie-ups.
Samsung and LG jointly account for some 40 pct of the global market for display panels, about the same as Taiwan, and Japan takes up the remaining 20 pct.
The moves are seen as a way to battle aggressive competition by Japanese rivals and alliances among Japanese and Taiwanese companies. Japan's Sharp Electronics and Taiwan's Chi Mei Optoelectronics (CMO) and Chunghwa Picture Tubes agreed to share patents last year. But Samsung and LG depend heavily on Japanese parts for their products.