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Monday, June 06, 2005
Flat panel TV output booms in South Korea as prices fall

As prices fall and quality improves, output is expected to rise sharply and flat panel TVs are forecast to nudge traditional TVs off department store shelves.

South Korea is the world's largest supplier of two most popular types of flat-panel screens -- plasma display panels (PDPs) and liquid crystal displays (LCDs).

More than half the world's PDP output and nearly half its LCD production come from South Korea.

"This is a global Mecca for the display industry," Beh Hong-Kyu, Samsung SDI's vice president for public relations, said, referring to the four LCD and three PDP assembly lines at this Samsung plant 90 kilometers (55 miles) south of Seoul.

Here at the plant run by Samsung Electronics and sister firm Samsung SDI, workers are feverishly packing LCDs and PDPs destined for 50 global TV makers, including Sony, Philips and JVC.

The hum of the assembly lines here is the death knell to the cathode ray tube (CRT) which has owned the global TV market for decades, according to analysts.

CRTs still prevail but are losing market momentum, Samsung SDI, the world's largest PDP maker, said in a report based on data from key market surveyors, US-based DisplaySearch and Japan-based TSR.

Global CRT sales stood at 172 million units in 2004, the report said. It predicted sales would drop to 145 million in 2007.

The trend for flat-panel TVs is rapid growth with 2.9 million sold in 2000, 6.7 million in 2002 and 17 million in 2004, the report said. It forecast 62 million in 2007.

Both PDPs and LCDs use a pair of glass sheets with cells of plasma gas or liquid crystals sandwiched in between. Technology continues to improve and reduce production costs, Samsung SDI said.

"The price for a 32-inch LCD TV will fall to the 1,500-dollar level later this year, when the demand will explode," Lee said. The 32-inch LCD TVs sold at 2,500-3,000 dollars per unit last year.

Shim Im-Soo, Samsung SDI's executive vice president, also said PDP prices were also falling. "The demand for PDPs will inflate in the second half of this year thanks to the falling prices."

PDP prices, which plunged about 40 percent last year, will fall another 28 percent this year, Shim said.

A 42-inch PDP TV, now selling at 3,900 dollars, will be priced about 2,000 dollars soon.

Samsung SDI and LG Electronics, both South Korean firms, supplied 24.4 percent and 22.0 percent respectively of the global demand for PDPs last year, DisplaySearch said.

Samsung Electronics and LG Philips, a joint venture between LG Electronics and Royal Philips Electronics of the Netherlands, took up 22.0 percent and 19.7 percent each of the global LCD market last year.

A few kilometers away from Cheonan, Samsung Electronics established a new LCD joint venture with Sony in April. LG Philips is building new five-billion-dollar LCD production facilities in Paju, just 40 kilometers north of Seoul.

Breaking world records for the largest panel displays, Samsung Electronics unveiled an 82-inch LCD in March this year and Samsung SDI came out with a 102-inch PDP in December 2004.

But Japan, a flat-panel business pioneer, is hitting back.

Matsushita, a Japanese electronics giant with the Panasonic brand, is spending billions of dollars to regain its past glory of being the world's top PDP manufacturer.

Japan's Fujitsu, which produced the world's first commercial 21-inch full-color PDP in 1992, has launched a joint venture with Hitachi in business consolidation.

Hitachi also forged a PDP business tie-up with Matsushita in February to face up to the tough competition while Fujitsu is pulling out.

Sony launched a two-billion dollar LCD joint venture with Samsung Electronics in South Korea while Sharp, a leading LCD TV maker, is increasing its investment in its own LCD panel plant in Japan.

Continued business expansion in South Korea and Japan may lead to supply gluts in the display market, but Samsung SDI dismissed such concerns.

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