By Kim Yoo-chul
Staff Reporter
Advancement in technology is often a life-or-death matter for electronics firms, perhaps even more so for parts makers such as LG Display, the South Korean liquid crystal display (LCD) giant.
However, equally crucial is avoiding spending too much money to get ahead when the risk is jumping the gun.
Meeting with reporters, Thursday, LG Display chief executive Kwon Young-soo revealed that the company has no immediate plans to invest in technology for 11th-generation LCD panels.
LG Display and domestic rival Samsung Electronics, the world's top-two makers of LCD panels, are still relying on eighth-generation technologies for their bread-and-butter, while their Japanese and Taiwanese rivals have begun dabbling with 10th-generation production lines.
In LCD manufacturing, each "generation" represents technology that allows manufacturers to produce larger panels at a cheaper cost.
The manufacturing process involves sheets of larger, fabricated glass substrates, each called "mother glass," being cut into smaller units for LCD and plasma display panels.
Eighth-generation technologies are optimized for providing LCD panels for 50-inch level flat-screen televisions.
A commitment to 11th-generation technology, however, would require confidence that the average consumer will be willing to pay a premium for televisions with 60-inch screens or bigger in the near future, and Kwon seemed skeptical about the possibilities.
The company will not invest in 11th-generation production lines for at least the next three years, Kwon said.
"It's questionable whether 11th-generation panels would guarantee significant improvements in productivity at better costs. Of course, succeeding generations in LCD making have thus far allowed us to be more efficient, but the differences appear to be less visible from the eighth-generation and beyond," he said.
"The risks include high development costs as well as larger spending on logistics. Our equipment suppliers will also have difficulties to develop and provide the required equipment."
An 11th-generation LCD line would use glass substrates measuring 3 meters by 3.3 meters, with one glass plate capable of producing eight 70-inch LCD panels.
A mother glass for a 10th-generation line is more suitable for fabricating screens over the 50-inch or more level.
"It's hard to imagine consumers rushing to buy 60-inch or 70-inch flat-screen televisions; those markets will be reduced to a niche. We expect that the market for 60-inch televisions won't take off until 2013," Kwon said.
"Any investment in next-generation panels should be based on the market situation. Timing is always crucial in the LCD business."
LG Display will build another LCD facility, dubbed "P9," in its LCD complex in Paju, Gyeonggi Province, which will extend the company's main eighth-generation lineup.
Kwon also expressed confidence in his company’s chances to win final approval from Beijing to build a $4 billion LCD plant in Guangzhou, China.
"The Chinese government is in the final stages of the decision-making process. The announcement will come within a month, and we are confident that we will be happy with the result," he said.
LG Display is planning to form a venture with Skyworth Digital Holdings, a Chinese television maker, and Guangzhou Kaide Technologies Development to operate the plant.
Samsung Electronics is also seeking approval to construct $2.2 billion LCD plant in Suzhou, Jiangsu Province in East China.
"We have put in our best efforts to attain approval. We did our best. Our in-plane switching (IPS) technology is highly competitive, as seen by Apple's decision to adopt our IPS tech-embedded LCD panel in its tablet computer, the iPad," Kwon said.