Samsung Electronics Co., the largest television producer in the world, announced yesterday
it will increase production of large liquid crystal display panels to meet growing demand.
"Samsung will increase the monthly production of 40-inch LCDs from 20,000 units in the second quarter
to 150,000 units in the fourth quarter," a company official said.
He also added Samsung`s output of 40-inch LCDs will be raised to 100,000 units this month.
The expansion is aimed at getting a jump on its competitor, LG.Philips LCD Co.,
which will begin production of 42-inch LCDs in the first half of next year, analysts said.
Samsung said it will complete a second production line for large LCDs in Tangjeong,
about 100 kilometers south of Seoul, in the first half of next year.
Samsung`s capacity expansion is expected to heat up its competition with LG.Philips LCD
in the large LCD market, according to the analysts.
Samsung began the production of 40-inch LCDs for the first time in April.
Currently, 40-inch panels are expected to become the mainstay of Samsung`s large LCDs,
though it turns out a wide variety of models from 15-inch to 46-inch panels.
"Though a 32-inch panel accounts for the largest portion of LCD sales in the company,
we expect customers` needs will move up to larger ones like a 40-inch,
because 32-inch panels are not large enough to satisfy customers watching TV
in a living room," a Samsung official said yesterday.
Thanks to Samsung`s advantaged position as the only 40-inch panel maker in the market,
it is not expected to lower the price of LCDs until its competitors such as LG.
Philips start the production of large LCDs next year.
Samsung`s LCD division posted a net profit of 10 billion won ($9.81 million) on sales of 2.12 trillion won
in the second quarter of this year, according to the company.
LG.Philips showed a loss in the first half of this year due to declining LCD prices,
but it is expected to go into black in the third quarter.
The two companies - the first and second largest LCD makers in the world - dominate more
than half of the total LCD sales globally with several small-sized Taiwanese LCD makers lagging far behind.