Samsung to Raise LCD Production for TVs
By EVAN RAMSTAD
Staff Reporter of THE WALL STREET JOURNAL
September 6, 2005
http://online.wsj.com/article/0,,SB112591909477931752,00.html?mod=technology%5Fmain%5Fwhats%5Fnews
SEOUL -- Samsung Electronics Co. said it will double the production
capacity of a huge factory it is now constructing to make liquid crystal
displays for large flat-screen televisions.
The move, announced yesterday, could speed up declines in LCD-TV prices and
give the Korean company more standard-setting power in the industry.
Samsung said it will spend 1.76 trillion won ($1.71 billion) on equipment
during what the company calls a second phase for its new factory. For the
first phase, it is spending 2.37 trillion won on equipment and the building
itself.
The additional production of 40- and 46-inch LCD-TV screens at the plant
should drive prices sharply lower for such TVs by the holiday season at the
end of 2006. Such sets, which currently sell for $3,330 to $4,500, have
been expected to be in the $2,000 to $3,000 range by a year from now.
The lower prices would make big-screen LCD-TVs more competitive with
similar-size plasma TVs, another type of flat-screen TV that now costs less
to produce per inch of screen size.
By boosting the output of the plant, Samsung is raising the stakes in its
fight with other LCD screen makers to standardize the sizes of large
LCD-TVs. At an industry conference in May, Lee Sang Wan, the president of
Samsung's LCD business, said the company believes LCD-TVs should be
standardized around 40-, 46-, 52- and 57-inch screen sizes.
Other manufacturers have optimized their new factories for screens that are
42-, 47- and 50-inches in size.
Last month, Samsung finished the building and started to move in equipment,
with a goal of starting production next April.
When the first phase of equipment reaches full production, which is
expected in August 2006, it will handle 45,000 sheets of glass per month.
Each sheet is the size of a queen-size bed and can be used to make either
eight 40-inch screens or six 46-inch screens.
Production in the second phase will start in August 2006 and full monthly
production of a further 45,000 sheets of glass will be reached a few months
later, a Samsung spokeswoman said.
The new factory building was constructed in Tangjeong, a small town about
100 kilometers south of Seoul, next to a factory of similar size that
Samsung built in a joint venture with Sony Corp. The joint-venture plant
began operation in April and just recently reached full production of
60,000 sheets of glass per month.
Samsung and LG.Philips LCD Co., also based in Korea, are the leading
producers of LCD screens, which also are used in cellphones, computer
monitors and other digital gadgets. Each company has about 22% of the
global LCD-screen market.
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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