By Kim Yoo-chul
The Chinese government has finally approved the much-awaited display factory plants proposed by Samsung Electronics and LG Display, the world's top two biggest LCD makers.
It is the first time that Korean electronics firms received the go ahead to build large-sized flat-screen facilities with cutting-edge technologies in China.
The approval means Samsung Electronics and LG Display will be able to sell their products without paying taxes in the highly-lucrative Chinese consumer electronics market.
Displays are widely used to manufacture televisions, monitors, handsets to other digital devices.
``Beijing approved the earlier proposals by Samsung Electronics and LG Display to build their latest display plants,’’ said a top-ranking executive who is familiar with the situation to The Korea Times, Thursday.
Samsung officials said it has been ``very near’’ to getting the go-ahead sign from Beijing, while several unnamed sources from LG Display told the English-daily that it has already been realigning its strategies according to the updates.
Kim Choon-gon, a senior Samsung Electronics spokesman, said the company is still waiting for any recent updates over its plan from Beijing, while Sohn Young-june, an LG Display spokesman, declined to confirm, immediately.
``As far as I know, LG Display will start the operation of the plant sometime within 2013. Samsung Electronics is aiming to start the new line from at that year,’’ according to the executive, asking not to be identified.
China delayed approving the plans because of worries over the industry’s oversupply and its appetite to save Chinese LCD makers which are lagging behind technologies compared to Samsung and LG Display.
Last year, LG Display submitted the $4 billion LCD plant in Guangzhou by applying highly-advanced eighth-generation technology, followed by Samsung to splurge on a $2.25 billion facility that will use 7.5-generation technology.
Large-sized LCD plants mean more productivity in making displays for sizable televisions.
China will pass over Western Europe to become the world’s second-biggest consumer electronics market, accounting for up to 20 percent of the global LCD TV market by the end of next year, according to the market research firm DisplaySearch.
Attracted by the lucrative market potential, leading display makers are in a rush to set up direct production bases to supply China’s rapidly-growing flat-screen market with mainland players already in the game.
Non-Chinese LCD firms in the past only kept back-end assembly lines in the country, while protecting their advanced technologies.
``Samsung and LG Display will start the construction of facilities after the Guangzhou Asian Games. Chinese authorities have changed their minds as the Koreans were mulling over the possibilities to invest in the next-generation facilities in Korea by scrapping the proposals,’’ another unnamed executive added.
``That will help Korea’s display industry to raise global shares in the LCD market.’’