Samsung, LG.Philips Clash Head-on for LCDs
By Kim Yoo-chul
Staff Reporter
The world’s No. 1 and No. 2 liquid crystal display (LCD) manufacturers, Samsung Electronics and LG.Philips LCD (LPL), are poised to clash head-on by investing more and strengthening ties with TV makers.
Their strenuous moves are based on their respective record quarterly profits on strong demand and stabilized panel prices. Even further, LPL is considering changing its name either to LG Display or LG LCD as its Dutch joint venture Philips has lowered its stake in the company below 20 percent.
On Wednesday, Samsung Electronics said it will spend an additional 800 billion won to produce more LCD panels on its seventh-generation lines to meet rising demand for pricey TV sets of over 40 inches.
Moreover, Samsung’s LCD division, which achieved 4.46 trillion won in sales and record quarterly operating profit in the fourth quarter, has also decided to supply the secondary line of its eighth-generation panels to its digital media division to realize a sales target of 18 million LCD TVs this year.
LPL, which also saw its highest net profit in three years thanks to the stronger market, has been intensifying efforts to catch up with Samsung by forging a solid partnership with TV makers.
``We have already inked preliminary contracts with one or two of our clients to secure stable panel distribution channels,’’ its CEO Kwon Young-soo told reporters.
``Besides, we will accelerate efforts to set up a strategic partnerships such as the recent HannStar deal in a bid to see the company get 5 more percentage points in profits than our competitor,’’ Kwon said.
To achieve the goal, LPL plans to produce more larger-sized panels through its eighth-generation line rather than pouring capital into the recently launched AM OLED lines.
``Although the overall market situation does not look good due to U.S. subprime woes and growing worries over a supply glut, we will cut production costs by transferring LCD module lines in our China plants,’’ he added.
Coupled with the main two factors ― Beijing Olympics and the faster policy shift to digital TVs in the U.S. ― the demand for LCD panels will increase nearly 20 percent this year, while supply will grow only some 8 percent, according to market research firms.