Samsung to invest $1B in new LCD plant

Samsung to invest $1B in new LCD plant

Samsung Electronics says it plans to spend more than $US1 billion on a new flat-panel display panel plant in the next year as it attempts to solidify its lead in the world thin film transistor (TFT) liquid crystal display (LCD) computer monitor and television market.

The South Korean company said that spending on its sixth TFT LCD plant would total $US1.03 billion.

Construction of the factory in Chonan, south of Seoul, had already begun and initial production was scheduled for the end of this year with full scale production commencing sometime in the first half of 2004, a spokesperson for Samsung Electronics, Sonia Kim, said.

When full production begins, the factory, which is Samsung's sixth LCD plant, will have a capacity of 60,000 fifth-generation glass substrates per month. Glass substrates are the large glass panels on which a number of LCD panels are built and a fifth-generation panel is 1.1m x 1.3m in size. Samsung has one other fifth-generation plant, although it can handle slightly smaller panels that are 1.1m x 1.25m in size, and that has a maximum capacity of 100,000 glass substrates per month.

Because of the large substrates that can be handled by the plant, Samsung said it intends to use the lines to manufacture TFT LCD panels of 17 inches or larger. Both size substrates have enough space to build either 12 17-inch LCD panels or nine 19-inch panels. The larger 1.1m x1.3m substrate can also accommodate eight 22-inch panels or three 32-inch panels.

Samsung is beefing up its production capacity for large size panels as it predicts the market for such displays is about to increase sharply. It estimated the worldwide market for LCD monitors was 32.4 million units last year and is expected to hit 48.6 million this year and grow to 78.4 million in 2005. LCD TV market demand, which Samsung said was 1.8 million units last year, is forecast to rise to 3.7 million this year and hit 12.1 million in 2005.

The company was ranked as the leading producer of TFT LCD panels in 2002 by market research company, DisplaySearch, with a 17 per cent share of the world market. Its nearest competitor, LG Philips LCD, had a 16.6 pe rcent share of the market for the entire year giving Samsung a 0.4-percent lead against a 3.0-percent lead in the 2001 Display Search figures. Worse still for Samsung, LG Philips was ranked as number one in the world market in the fourth quarter 2002 results.

Looking ahead, Samsung said it was also reviewing plans for a seventh generation LCD plant in Asan, near Chonan. Such lines would be capable of handling glass substrates of size 1.8m x 2.1m. The company recently said the seventh generation plant could be in operation in late 2005.

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