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Could Samsung be interested in buying Universal Display?

|Includes: Universal Display Corporation (OLED)

In Universal Display’s Q3 2010 conference call, Steve Abramson mentioned that they further extended their existing agreement with Samsung until the end of the year which is making me wonder why it’s taking so long for the two to hammer out a new deal.  I think the delay is a positive signal for Universal Display as it probably means they have some negotiation power over the much bigger Samsung.  I’m just wondering if the talk has gone off a tangent and possibly be about Samsung acquiring Universal Display?  Steve Abramson refused to answer any questions regarding the negotiation calling it “really confidential” in the Q&A session.

If so, this is not the first time Samsung tries to acquire a company for their IP in the process of negotiating licensing deals.  Back in 2008, Samsung tried unsuccessfully to acquire Sandisk while negotiating a new licensing deal with them for NAND technology.  It’s also no secret OLED is important to the future of Samsung Display.  They are currently the leader in OLED displays and will increase their production ten folds next year.  OLED is not only strategic to Samsung’s mobile phone business as they’ve heavily advertised the benefits of their Super AMOLED display, it will also separate them from their competitors in the cutthroat TV business.

Besides LG already bought Kodak’s OLED business last year and back in 2007, Sumitomo Chemical bought Cambridge Display Technology for $285 million.  It certainly will make sense if Samsung decides Universal Display will provide them a valuable portfolio of OLED IPs.  On a side note, it seems like Universal Display already have some high level scientists who are Korean, as can be seen here and here so the marriage with Samsung certainly won’t be lost in translation.

Disclosure: Long PANL