Display Makers Devise 2-Tier Production Scheme
By Kim Yoo-chul
Staff Reporter
South Korean flat-panel manufacturers are moving forward to a two-tier manufacturing system as part of cost-cutting efforts to capitalize on overseas markets.
Analysts interpret the moves by the makers of liquid crystal displays (LCDs), plasma panel display panels (PDPs) and organic light emitting diodes (OLED) displays as a dual strategy keeping panel module lines requiring high technology at home, while moving labor-intensive lines overseas.
Earlier this month, Samsung Electronics said it will complete the construction of a new Russian plant by November next year to take a bigger stake in the former Soviet bloc. The plant, when completed, will roll out 2.2 million digital TV sets a year on a 190,000 square meter site.
The electronics giant has also announced a plan to operate plants in China and Slovakia.
Samsung will let its second China plant located in Suzhou specialize in producing TV panels for LCDs and serving as the first regional plant for IT-related products such as laptops and monitors, according to the company.
The company’s Slovakia plant, which is now under construction, is designed to gain leadership in European consumer electronics markets from early next year.
LG Philips LCD, a joint venture between LG Electronics and Royal Philips Electronics NV of the Netherlands, will start operating its LCD module facilities in the Chinese city of Guangzhou in November after years of construction.
The Guangzhou complex is the third of its kind, following similar models in the Chinese city of Nanjing and in Poland.
The world’s second largest LCD panel maker expects its new 33,000-square-meter factory to meet explosive demand for pricey TV screens ahead of next year’s Summer Olympic Games in Beijing.
Samsung SDI is also ready to start PDP module lines at its plant in Hungary, according to the company.
``The Hungarian factory and a complex in Shenzhen will be in charge of the European and Asian markets, respectively,’’ said an official from the display supplier.
``For a bigger presence in North America, we are having internal discussions to construct additional TV facilities in Mexico,’’ added the official.
Analysts said moving assembly lines out of the country does not necessarily guarantee greater profits.
``It’s not a matter of `yes’ or `no,’’’ said Kim Ji-soo, a senior analyst from Good Morning Shinhan Securities.