LG Display to Create R&D Center in China
By Kim Yoo-chul
Staff Reporter
LG Display plans to jointly set up a research and development (R&D) center in Shenzhen, China, with Skyworth Digital Holdings, a Chinese TV set manufacturer.
``Our company and Skyworth have agreed to set up the 50-50 joint venture to create the `Guangzhou New Vision Display Technology Research and Development’ center,’’ an LG Display spokesperson said Monday, adding that the total 7 billion won cluster will operate in May.
LG Display, the world’s No. 2 manufacturer of large-sized liquid crystal display (LCD) panels after Samsung Electronics, said Skyworth bought small stakes of its subsidiary in Guangzhou in early January, which the South Korean company claims is a move to secure stable demand channels for LCD panels amid the market boom.
Separately, the Chinese company said it will build a TV manufacturing plant near LG Display’s module plant in Guangzhou, attracted by advantages of cost cuts and efficient sales channels.
``The strategic partnership will pave the way for LG Display to nurture our business in China,’’ the spokesperson added.
The announcement came a month after the LG was seeking alliances with Taiwan’s Amtran Technology and other companies as part of its strategy to expand its client base after its Dutch joint venture Philips had gradually dumped its stakes in the South Korean company.
Even some industry experts say the Korean company could probably enter the LCD TV business as Amtran makes LCD TV sets under the Vizio brand in the United States. Amtran later said it is in talks with LG Display for ``further cooperation.’’
The Korean firm hopes that its share of China’s flat-screen TV panel market will rise to 40 percent in 2009 from 35 percent this year as millions of Chinese are buying new TV sets, particularly 42-inch ones, which are the company’s main product.
To meet surging demand for such TV sets, LG Display will expand the production capacity of its assembly lines for LCD panels and PC monitors in the southern city of Guangzhou to 20 million units by 2010.
Research firm Display Search expects LCD TV shipments in China to jump 70 percent this year to nearly 15 million units. It also sees the global flat-screen TV market growing 30 percent this year.
LG Display, formerly LG.Philips LCD, is expected to post 720 billion won in net profit in the first quarter of this year due to a weaker local currency and rising production yields.