Samsung to build new LCD line

By Kim Yoo-chul

Samsung Electronics is reviving its plan to add a massive $3 billion liquid crystal display (LCD) production line in its joint venture with S-LCD in Tangjeong, South Chungcheong Province, a Samsung executive said.

If the plan is revived, it is likely that the two electronics firms will jointly pay for the costs, although it is possible for Sony to go solo, industry sources said.

The new plant will likely be based on the latest 11th generation production technology. The construction plan was shelved due to a down market.

Samsung insiders say that the plant would provide screens for the company's new generation of flat-screen televisions, including models with Internet connectivity or supporting three dimensional (3D) stereoscopic images.

"We have seen substantial progress in the plans to build the advanced panel plant within our LCD complex near Seoul. We are focusing on securing equipment, materials and parts for building the line," Chang Won-kie, the head of Samsung’s LCD division, told The Korea Times, Wednesday.

Chang said Samsung will make a final decision on the plant soon, depending on the market situation.

"Right now, the LCD market appears to have hit the bottom. However, we can expect the sector to turn around during the first quarter of next year at the earliest," Chang said.

"We expect the demand for 3D televisions to strengthen next year when there will be a greater wealth of customized content for consumers."

Chang also said that Samsung's senior executives have recently met with Sony Chairman Howard Stringer and other top-decision makers at the Japanese company to discuss potential collaboration over 3D content and other fields, although he declined to reveal the details of the talks.

"It's reasonable to think that Samsung will form a united front with Sony on the new LCD line, as Sony has been increasingly relying on the panels produced from S-LCD to boost its muscle in 3D and smart televisions," said a veteran industry insider who refused to be named.

"Saving production costs is crucial for Sony, which now looks to invest more in software and content instead of just on the hardware side of its business," he said, predicting that Samsung's new line will be up and running by sometime around 2013.

"Regarding the investment for Samsung's 11th generation LCD panel, nothing has been decided at the moment," Natsuki Eto, a spokeswoman for Sony’s headquarters in Tokyo, said.

Kim Choon-gon, a senior Samsung Electronics spokesman, declined to comment.

Samsung and Sony had admitted to plans to invest in an 11th generation line, only to back track later citing the bleak market situation.

Chang dismissed a report issued by Citigroup that predicted Samsung's LCD business to swing to a loss in the fourth quarter.