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Samsung, LG both open new LCD factories

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Two of the world's largest manufacturers of LCD (liquid crystal display) panels have started making screens at new factories that should enable them to cut manufacturing costs and so lead to further price reductions in big-screen, flat-panel televisions.

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Samsung Electronics Co. Ltd. kicked off 2006 by starting commercial production of LCD (liquid crystal display) panels at a new factory on Sunday, four months ahead of its original schedule, it said Sunday. LG.Philips LCD Co. Ltd. also started production at a new facility, it said Monday.

Both production lines are in South Korea and both will be capable of processing up to 45,000 sheets of mother glass -- the large sheets of glass on which LCD panels are made -- per month when they reach full output. The new lines process mother glass that measures 187 centimeters by 220 cm, from which eight 40-inch panels or six 46-inch panels can be made. That means each line can produce several hundreds of thousands of panels for big-screen TVs per month.

The glass handled by both plants is called "7th generation" glass for its size and is the largest glass yet employed by Samsung and LG in commercial production. By using larger glass a greater number of panels can be made from each sheet and this should mean cost savings. A lower per-panel cost for both companies is important because of the fierce competition in the flat-panel TV market.

Both companies are already planning to expand the new factories. Samsung has invested 2.4 trillion won (US$2.3 billion) so far, and has plans to invest a further 1.8 trillion won this year to double capacity to 90,000 sheets of mother glass per month by the end of 2006, it said. LG said it also plans to double production to 90,000 sheets per month by the first quarter of 2007.

Samsung's new factory is situated in Tangjung, South Korea, alongside a similar factory that began operating in April, and that is owned by S-LCD Corp., a joint-venture company of Samsung and Sony Corp. The S-LCD factory can process up to 60,000 mother-glass sheets per month at present and also produces LCD panels for big screen TVs. Production is divided equally between Samsung and Sony. Plans have also been announced to expand this line to handle up to 15,000 mother-glass sheets by July this year.

When expansion is completed at both plants total production capacity in Tangjung will be up to 165,000 mother-glass sheets per month, which is equivalent to just under a million 40-inch LCD panels per month.

Samsung also said Sunday that sales in the first 11 months of 2005 had passed US$10 billion. The company, which is the world's biggest LCD panel maker, said this makes it the first LCD maker to pass the landmark figure in one year.
LG's new factory is in Paju.

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