Samsung Electronics plans to buy QD Vision, a U.S.-based technology firm specializing in quantum dot materials, in its bid to stay ahead of the next-generation display competition against LG's OLED TVs.
"We decided to acquire (QD Vision)," Samsung Advanced Institute of Technology (SAIT) President Chung Chil-hee told reporters, ahead of a weekly Wednesday meeting with presidents of Samsung affiliates.
Samsung did not confirm the exact value of the deal. But it is estimated to be some $70 million (82.14 billion won).
Samsung has been the global TV market leader for 11 consecutive years. The transaction came as Samsung hopes to tighten its grip on the high-end TV market by promoting the technological edge of its quantum dot TVs.
The Seoul-based firm is expected to generate synergy in applying core technologies for the nano-sized materials, called quantum dots, into its premium TV lineup, using QD Vision's expertise and patents.
The U.S.-based firm was established by a group of MIT researchers in 2004, focusing on developing core technologies for quantum dot materials. The company has so far partnered with a group of global TV manufacturers _ including China's TCL, Hisense and Sony of Japan.
Samsung Electronics is seeking to expand its presence in the next-generation television market by collaborating with QD Vision in such areas as heavy metal-free quantum dot technologies.
In particular, the latest announcement is expected to heat up the already-intense rivalry between Samsung and LG over the next standard for the TV industry.
LG has aggressively promoted the technological advantages of its self-lighting OLED pixels, as they do not require any backlight panels and can deliver a deeper black color.
But Samsung is expressing confidence in its quantum dot TVs, with Kim Hyun-seok, president of Samsung Electronics' visual display division, touting quantum dot LED (QLED) TVs to be the mainstream of the future TV industry, as it embraces the core selling points of the LCD and the OLED.
At this year's Consumer Electronics Show (CES) in Las Vegas, Kim highlighted that its quantum dot SUHD televisions come with 1,000 nits of brightness, the industry's highest level among high-dynamic-range (HDR) TVs. In recent years, HDR has been the talk of the town in the television and content industry, as the technology can display a wider range of dark and light levels, creating more vivid images.
"The role of quantum dot displays will become more and more important, with the HDR gaining more traction," he told reporters at CES 2016.
Globally-renowned content creators _ including Netflix and Amazon _ have recently started to offer the HDR services, even though it is expected to take more time for its standardization in the industry.
"The latest deal is expected to generate massive synergies, as Samsung will be able to take preemptive actions over potential patents suits by taking advantage of QD Vision's patents over quantum dot core technologies," said Hyundai Securities analyst Kim Dong-won.
"Expectations are that Samsung can expand its reach into the next-generation TV leadership by releasing its QLED TVs earlier than expected."