 Lee Sang-wan, head of Samsung Electronics’ LCD business division, talks about the future of the flat panel display landscape in a conference held in a Seoul hotel, Thursday. / Korea Times |
By Kim Yoo-chul
Staff Reporter
Long-time rivals Samsung and LG Electronics have agreed on a cross-purchasing deal, a step apparently aimed to survive the ever-fierce competition in the global market for flat TV screens and panels.
``As scheduled, we will supply our 52-inch liquid crystal display (LCD) panel to LG Electronics from July this year as the supply and demand imbalance will be eased thanks to the operation of the second phase of the eighth-generation line in two months,’’ Lee Sang-wan, chief of Samsung Electronics LCD division told The Korea Times, Thursday.
The production capacity from the line is expected to be 60,000 sheets per month, initially _ on a substrate glass input basis.
Lee was attending a display conference held in a Seoul hotel chaired by the Ministry of Knowledge Economy.
Samsung Electronics has so far been refusing repeated calls by LG Electronics to provide larger-sized panels, citing a tight supply in the industry.
``As Samsung earlier clarified, we will also buy 37-inch panels from LG Display depending on the market situation, however, the decision will be made by July,’’ Lee said, adding the world’s biggest LCD TV set and panel maker is reviewing such a possibility, positively.
Although some technical matters over panel pricing and the technology gap have still remained, experts hope the decision, if realized, will put the South Korean TV manufacturers in a better position to compete with their Taiwanese rivals.
``Cross-purchasing has long been an issue, however, the bilateral tie-up is to help Samsung and LG widen the market gap with their Taiwanese and Japanese rivals,’’ a spokesman from Samsung Electronics said.
According to industry estimates, Samsung buys a combined 60 percent of its 32-, 37-, 40-, 46 and 52-inch LCD panels from Taiwan-based suppliers, while LG Electronics buys a combined 34 percent 32-, 37-, 42-, 47- and 52-inch panels.
With global flat-panel TV demand estimated at 100 million this year, the South Korean players and their Japanese rivals such as Sony and Sharp have been competing in the key U.S. and European markets despite concerns over profitability due to aggressive price-cuts.
By riding such a boom, Taiwanese panel suppliers have been enjoying increasing orders from Samsung and LG because the local rivals wanted more market share, globally.
``We have also engaged in detailed talks with LG Electronics and LG Display to cross-buying unfinished LCD panels or cells and a decision will be made soon,’’ Lee said.
``Cell’’ is a term in the flat-panel industry that commonly refers to the status of a glass panel before key parts, such as backlights, are added. This process costs half of what it costs to make an LCD panel.
More Investment With Sony
Meanwhile, Lee opened the possibility that Sony will invest in the next 10th generation LCD manufacturing line over 70 inches through their joint venture, S-LCD.
``I am positive that Sony will join forces with us for the development of the next-generation LCD panel line,’’ Lee, who is also the chief of the Korea Display Industry Association said.
A month ago, Samsung and Sony decided to establish an additional 8th generation LCD line at a cost of 1.8 trillion won.
Speculation was high that Sony would team up with Sharp for the next-generation line in a move to surge ahead of once late-comer Samsung.
``As far as I know, Sony will join hands with us on the 10th line,’’ a Samsung executive said.
yckim@koreatimes.co.kr
