LG Display: new line opens

LG Display, the world“s second-biggest manufacturer of LCD screens, said 14 May 2010 that operation of its extension line of the existing eighth-generation panel plant began on 1 May 2010.
The new l…

LG Display, the world“s second-biggest manufacturer of LCD screens, said 14 May 2010 that operation of its extension line of the existing eighth-generation panel plant began on 1 May 2010. The new line, called “P8E”, will mainly produce flat-screens for televisions to meet the rising demand from its major television set makers. LG Display“s key clients range from LG Electronics to leading Chinese TV makers, while it also supplies screens to Apple, Hewlett-Packard and Dell. “The extension line, with an initial monthly capacity of 30,000 glass sheets, will churn out 32-, 47-, and 55-inch LCD panels for televisions”, said Claire Ohm, a company spokeswoman. LG has invested some KRW 3.4 trillion (USD 3 billion) in the line located near the Demilitarized Zone (DMZ) that divides the Korean peninsula, excluding the building cost, Ms. Ohm said, adding some 2,200 new workers were hired. She said the company is aiming to raise the monthly production capacity to 120,000 units by the end of 2010 as it is positive about the continued tight supply situation seen in the global flat-screen industry through to 2011. “Growth in LCD panels for televisions is expected to outpace earlier predictions. The operation will pave the way for us to actively respond with growing calls from clients”, she added. Unlike its main domestic rival Samsung Electronics, LG Display is pushing its aggressive investment plans as its chief executive Kwon Young-soo is very keen to eventually lead in the sector. LG was the winner for the first three months of this year by profits. During the January-March period, LG earned a KRW 800 billion operating profit, while that of Samsung approached KRW 500 billion. LG also supplies its in-plane switching (IPS) technology-based LCD panels to Apple“s iPads, while Samsung is making “all-out” efforts to provide its panels to the US consumer company, without any concrete results. The company has also won approval from Beijing to build its latest eighth-generation line in southern China by knocking off Samsung, which is struggling to revamp its detailed investment plans this year due to such issues. The LCD business is cyclical and highly volatile; making the profit structure rather susceptible to economic conditions. If economies weaken, then consumers will delay either upgrading their consumer gadgets or buying new ones, in turn delivering a blow to LCD makers. Although there are some worries that the sector may go into another oversupply phase due to production muscle by top-tier makers during economic recovery, it seems too early to discuss another downturn at least with just market data. DisplaySearch, a market research firm, expects the demand for global LCD TVs to expand to 195 million units by the end of this year from 163 million units in 2009. The demand is forecast to increase to 216 million units in 2011. “Still, the growth pace for LED-backlit LCD TVs and three dimensional TVs is bullish, capitalizing on developed markets such as the United States and even China”, Ms. Ohm said.