Samsung, LG increase flat-panel production, investment

Samsung, LG increase flat-panel production, investment

Two of the world's biggest flat-panel display makers, Samsung Electronics and LG Electronics, are expanding and investing in panel production as competition increases in the big-screen TV sector.

LG began mass-production at a new Plasma Display Panel (PDP) line last week and Samsung started equipment installation of a new liquid crystal display (LCD) production line at the beginning of August. Recently, Samsung said it will invest a further 1.8 trillion won ($US1.7 billion) to double the capacity of the new line.

The expansion plans are based on two bets. The first, that the market will continue expanding, is all but assured. Consumers are buying flat-panel TVs like never before thanks to intense competition that is driving down prices and there are no signs of this growth stalling. The second bet is related to the screen technology. LG is making PDP panels and Samsung is making LCD. Each has its strong and weak points and the likely winner of the technology race depends on who you ask.

In volume terms, LCD dominates the market, in part because it's used in cheaper and higher volume flat-panel TVs. With a few exceptions, LCDs can be found in TVs up to around 40-inch screen size. Televisions based on PDPs begin in the 30-inch class and run all the way up to the largest flat-panel TVs on the market. It's in the middle ground where the technologies intersect that some of the fiercest competition can currently be found.

The competition is based on both price and technology and it's here that the new manufacturing lines come in. Newer production machinery can handle larger pieces of mother glass, which is the glass on which panels are made, and so economies of scale mean the per-panel production cost is lower. It also means more panels can be made in less time, further providing an advantage. The latest lines can also make cutting-edge panels that are brighter, crisper and deliver an all-round better picture than older manufacturing lines.

The LG line that started operation on Thursday can cut six PDPs from a single sheet of glass and is ready for a recently developed technology that will realise eight panels from a single sheet. Monthly production is initially 120,000 panels but this will rise to 160,000 panels when the 8-panel processes is put into use, the company said. LG invested 660 billion won in the line.

The Samsung line will begin production in April 2006 and is capable of handling glass up to 187cm x 220cm. The initial investment of about 2.4 trillion won means a capacity of 45,000 glass sheets per month and Samsung said it would invest a further 1.8 trillion won to double this to 90,000 sheets per month. The actual number of LCD panels that can be produced each month will vary depending on the size of panel being made.

As a guide, Samsung said eight 40-inch or six 46-inch panels could be produced on each sheet.

A plant with similar technology is already in operation. S-LCD, a joint-venture of Samsung and Sony, began production in April this year.

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