By Kim Yoo-chul
Staff Reporter
Samsung Electronics is planning to build an 11th-generation liquid crystal display (LCD) plant at its LCD complex in Tangjeong, South Chungcheong Province, after scrapping a plan to build a 10th-generation plant.
Samsung and industry sources say the world’s No. 1 LCD panel manufacturer was known to have opened discussions with Sony for the next-generation panel business in a bid to strengthen tie-ups with the Japanese company and to hedge risks in investments.
``Construction on the plant is slated to begin in 2009 and production is projected to commence possibly from the third quarter of 2010,’’ a high-ranking industry source told The Korea Times, Thursday, adding Samsung was sanguine in the face of the recent Sony-Sharp deal of the 10th-generation LCD business.
``Initial investment is estimated between 3 trillion won and 4 trillion won as the construction of one eighth-generation line usually requires some 1.8 trillion won,’’ according to the source.
Samsung has internally decided on the size of glass substrate, and sources say the company will probably adopt a size between 10- and 20-percent higher than that of Sharp’s 10th-generation 2880mmX3130mm.
The source, however, declined to comment on the planned capacity of the plant.
Analysts have interpreted that the plan reflects Samsung’s aim to keep its current momentum in the global LCD TV market by massively producing the industry’s mainstream 40-inch level LCD TV sets.
According to market research firm DisplaySearch, Samsung ranked first with a 22.2 percent market share by value in the world LCD market in the first quarter. Sony, Sharp and LG Electronics followed with 18.1 percent, 10.1 percent and 9.7 percent, respectively, over the period.
``Samsung wants to maintain the current leadership in the 40-inch level global LCD panel industry rather than focusing on the greater-sized flat screen market,’’ the source says.
In November last year, Kim Sang-soo, vice president of Samsung’s LCD business division told the paper that his company was considering investing in the 11th-generation production line to cope with demand for super-sized LCD panels larger than 52-inches.
Succeeding generation technologies allow manufacturers to produce larger panels at a cheaper price. The 11th-generation LCD line enables eight 70-inch LCD panels to be produced using just one glass plate.
The possible Samsung blue-print comes after Lee Sang-wan, head of the company’s LCD business division told reporters October last year that Samsung had been reviewing ways to invest in a 10th-generation production line.
``Literally, the size of glass substrate from Samsung’s 11th-generation line is smaller than the industry standard ― 3200mmX3600mm. That’s why the plant is actually for a 10.5 generation line,’’ another industry expert said.
In February this year, Samsung was shocked as its bigger Japanese rival Sharp agreed with Sony to set up a joint venture that will manufacture and sell LCDs.
A new Sharp plant now under construction in Sakai, western Japan is expected to be able to process 72,000 sheets of 10th-generation mother glass a month.
A sheet of mother glass is a large, fabricated glass substrate that is cut into individual units for LCD and gas plasma flat panels. 10th-generation mother glass is considered suitable for fabricating large screens of 40 inches.
Meanwhile, a high-ranking Samsung Electronics official said the company is in talks with Sony regarding additional investment in the second phase of the 8-2 line at their joint venture S-LCD Corp. in Tangjeong.
``It is true that Samsung’s LCD business has been engaged in talks with Sony about a joint investment in the second phase of the 8-2 line and the result will come out soon,’’ the official said.
In April this year, Samsung and Sony signed a contract to establish the first phase of the 8-2 line at S-LCD. Total investment for the initial 8-2 line will be approximately 1.8 trillion won.
S-LCD, established in April 2004, started its 7th-generation line operation in April 2005 and its first 8th-generation line operation in August 2007 to manufacture and supply LCD panels to Samsung and Sony.
``Our visual display unit will join the plan as a show-case after Samsung Electronics vice chairman Lee Yoon-woo pledged to guarantee investment independency on key affiliates,’’ the Samsung official said.