Samsung Electronics and LG Electronics have agreed for the first time on a cross-purchasing deal for LCD panels for televisions. The world's first and second makers of LCD panels are expecting to take advantage of each other investments in different LCD product lines in order to offer their customers a wider variety of LCD panel sizes.

Under the deal, Samsung will buy 37-inch LCD panels from LG Display, a subsidiary of LG Electronics, while LG will buy 52-inch panels manufactured by Samsung.

The two companies are also exploring a cross-purchasing system in which Samsung Electronics' LCD division and LG Display's panel division would buy each other's LCD modules and cells on a regular basis.

The 37-inch LCD panels are currently manufactured only by LG Display and Taiwanese firms such as Au Optronics Corporation and Chi Mei Optoelectronics. Samsung had been sourcing all of its panels of this size from the Taiwanese firms, while LG Electronics had imported 34 percent of its 52-inch panels from Taiwan.

The deal is expected to be finallized in June. Without any doubt, the deal between the two S. Korean "rivals" is benefiting Taiwanese firms.

In related news, LG Display plans a massive plant expansion by investing 1 trillion won (US$957.4 million) to increase production at its plant, the company said on Thursday.

The output of the plant will be raised to 230,000 panels a month from the current 170,000, with the increase to be mostly used for the production of monitors for desktop and laptop computers.