LG Philips, a tag-team consisting of LG Electronics and Philips Electronics, announced an agreement with Hewlett-Packard to become HP’s primary supplier of flat screens for notebook PCs and LCD monitors.
HP looks to secure an industry leading source (LG Philips’ main rival is Samsung) to lower the price of liquid crystal display monitors by ramping up mass production.
The two tech giants concreted the deal in Seoul, Korea, where LG Philips bases its operations.
Almost immediately shares or HP and LG Philips seem to rise on Wall Street, HP rising 15 cents to $22.75, and LG Philips US upped there shares by 94 cents to $26.36.
In a statement, LG Philips said the deal would help it gain momentum in the notebook LCD market, after claiming the top position in the large monitor and LCD TV market.
Industry analysts say the deal won’t affect HP employment one way or the other as outsourcing these types of products is common. The most important aspect of the deal was to get a consistent supply at lower prices.
Of the three biggest LCD makers, Samsung commands about 25% of the market, LG Philips hold about 20% and AU Optronics claims 15%.
