Samsung to spend $963m on latest LCD plant
Investing in competition-beating economies of scale
Samsung is to spend a total of 1.29 trillion won ($963 million) on its latest LCD production facility, Line 6, the company said today.
Last December it said it would spend 66.1 billion won on Line 6, which is currently under construction. Samsung expects the plant to be operational by the end of the year.
The new line will be capable of producing 60,000 fifth-generation (1.1 x 1.3m) glass substrates per month when it enters full operation some time in the first half of 2004. It will churn out 17in and larger monitor panels, and 20in-plus TV screens - each substrate yields 12 17in or nine 19in panels, said Samsung.
The move, hopes Samsung, will allow it to increase its share of the LCD market, in particular its lead over its nearest rival, LG.Philips - though it too claims market leadership. It also hopes to outclass smaller LCD producers who can't compete with Samsung's economies of scale. That same tactic allowed the giant to dominate the world memory market.
Samsung's goal is to reduce the cost of LCD panels, which should mean cheaper displays for consumers. In the longer term, that may happen, though we note other producers are complaining that prices will have to rise, thanks to the Iraq war. The cost of shipping panels has risen since the commencement of hostilities, the Economic News reports, leading to a $5 increase on the price of a 17in panel, presumably thanks to greater insurance premiums. ®