By James Wells
Tangjeong, KOREA: Sony and Samsung signed a letter of intent yesterday to manufacture 8th generation amorphous TFT LCD panels within their existing joint venture – S-LCD Corporation.
The factory will manufacture the next generation after Sony’s current Bravia LCD televisions and the next generation of Samsung high definition LCD televisions.
According to a spokesperson for Sony Australia, the target is to sign a definitive agreement by the end of June 2006.
In the letter, the two companies outlined the details of the cooperation.
“We plan to establish an 8th generation amorphous TFT LCD panel production line with glass panel size approximately 2,200mm × 2,500mm at S-LCD at Tangjeong in Korea. S-LCD is currently manufacturing 7th generation amorphous TFT LCD panels,” the letter said.
“We plan to invest approximately $US2 billion in the 8th generation amorphous TFT LCD panel facility and actual production is targeted to start in fourth quarter of 2007. Planned production capacity: 50,000 panels per month.
“The demand for LCD TVs is expanding and the large-screen TV market is expected to be especially dynamic from now on. By launching a production line for 8th generation amorphous TFT LCD panels, Samsung will target further business expansion in the LCD panel market for LCD TVs and Sony will continue to proactively focus on cost-competitive and high-quality large screen products, targeting an expansion of its LCD TV business.”
The Sony and Samsung announcement follows the decision by two Taiwanese liquid crystal display panel makers on Friday to merge in a $US2.2 billion deal to compete with larger companies such as S-LCD, LG.Philips and Sharp.
The two Taiwanese companies, AU Optronics and Quanta Display, will become the third largest manufacturer of LCD with approximately 20 per cent of the market.
The business, to be known as AU Optronics, may look to increase prices of LCD following substantial decline in pricepoints.
According to Sony Australia deputy managing director, Carl Rose, the market is clearly shifting towards LCD at a rapid rate.
“Yesterday’s announcement further reinforces our commitment to delivering exceptional HD LCD product across a variety of screen sizes. Ensuring that sales staff sell up, and not down, has never been more important to Australian retailers’ bottom lines,” Rose said.
“Customers have demonstrated a propensity to spend more in the flat TV segment and are now looking to retailers for advice. I believe the next 12 months in Australia will be defining as savvy retailers position themselves for a healthy move on the path to HD television, HD gaming and video formats.
“It would seem to make good business sense to emulate the success of many UK independents – who did very well off the back of LCD by selling what the customer needed: a quality product to satisfy their current and future needs.”
According to Samsung general manager – marketing, Kurt Jovais, the new facility will manufacture LCDs from 40-inches and 46-inches and larger.
“It’s really about the big screen LCDs,” Jovais said.
“LCD size is increasing and we know there will be price pressure in the future, so we have set up a facility to manage our costs. Plasma is very popular at the moment, but we see the future of flat panel will be in LCD because of its very impressive technology,” he said.
Although both companies jointly fund and staff the S-LCD venture, Samsung is in charge of day to day operations.