Sony, Samsung to Build New LCD Factory

Due to strong demand for flat-panel television sets, Sony and Samsung Electronics plan to build one of the world’s most advanced liquid crystal display (LCD) panel production lines, they said Friday.

The two companies will invest 1.8 trillion won (US$1.9 billion) in the new factory, which will be operated by S-LCD, their LCD manufacturing joint venture. S-LCD already operates a factory in Tangjeong, South Korea, and the new factory will be located alongside this existing plant.

The joint investment will go toward machinery and other systems. Samsung will invest an additional 900 million won and construct the factory building itself.

The factory will house a so-called eighth-generation (8G) line, which is one step more advanced than S-LCD’s existing line. An 8G line is capable of processing sheets of glass that measure 2 by 2.5 meters, from which eight 46-inch TV panels or six 50-inch TV panels can be produced.

Current plans call for the factory to begin production in late 2007 at a capacity of 50,000 sheets of 8G glass per month. Sony and Samsung divide output from S-LCD equally and then use the screens in their own TVs or sell them to other manufacturers.

Strong worldwide demand for LCD TVs is driving the companies to increase production. On Friday, Samsung increased its prediction of global demand for LCD TVs for this year to 48 million units, up 4 million from its previous forecast. Samsung sold 1.2 million LCD TVs in the second quarter of this year, four times what it sold in the same three-month period one year earlier.

Friday’s deal cements a preliminary agreement reached between the two earlier this year.

-Martyn Williams, IDG News Service (Tokyo Bureau)

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