LG Display turns on new Korean plant to meet demand

PUBLISHED : Tuesday, 10 March, 2009, 12:00am
UPDATED : Tuesday, 10 March, 2009, 12:00am

To meet fresh demand for televisions in the mainland's countryside, LG Display, the world's second-largest maker of thin-film transistor liquid crystal display, has begun mass production at a plant in South Korea.

'The start of mass production in the eighth-generation plant [in Paju, Korea] will enable LG Display to actively respond to growing market demand further stimulated by narrowed price gap between LCD televisions and cathode-ray-tube televisions, and the rapidly increasing Chinese market, thanks to the [mainland] government's 'home appliances to the countryside' policy,' the company said yesterday.

The four-year home 'appliances to the countryside' scheme was launched on February 1 as part of the central government's initiatives to help stimulate domestic electronics manufacturing and consumption in the mainland's rural areas.

Rural families will receive subsidies to buy two home appliances each under the policy rolled out nationwide last month. More than 200 million households are expected to be eligible for a subsidy equal to 13 per cent of the prices of home appliances they bought.

The central government will answer for 80 per cent of the rebate provided to rural consumers, while 20 per cent will be met by the provincial government.

Sichuan Changhong Electric Group, a leading mainland manufacturer of television sets and other electronics appliances, has projected it could generate up to 8 billion yuan (HK$9.07 billion) in revenue this year as a participant in the government subsidy programme.

CCID Consulting estimates 210 million large TFT-LCD panels were sold last year to mainland manufacturers, using them on widescreen notebook computers, monitors and televisions.

LG Display, part of LG Electronics group, will primarily produce 32, 47 and 55-inch television panels from its new plant.

The initial monthly capacity will be 20,000 input sheets of glass substrate, which could be increased to 83,000 sheets by the end of this year based on demand.

LG Display operates seven production plants. It also runs back-end assembly facilities on the mainland, Korea and Poland.

LG Electronics and top LCD supplier Samsung Electronics control about 50 per cent of the global market for LCDs, which are also used in mobile telephones and other applications.

Market research firm DisplaySearch estimates the global LCD television market will reach 181 million units by 2011, up 35 per cent from the 134 million units expected to be shipped this year.

The mainland remained the world's largest market for televisions by volume last year, accounting for about 19 per cent of the 105 million units shipped worldwide, DisplaySearch said.

It noted that LCD televisions picked up market share in every region, generating especially strong share gains on the mainland and in eastern Europe.

According to a report published yesterday by Macquarie Group, LG Electronics' global LCD television market share would increase to 15 per cent this year from 10 per cent a year ago.

'The industry experienced drastic market environment changes last year. However, we built a strong business structure that can effectively deal with such changes,' said Young Soo-kwon, the chief executive at LG Display.

The company expects its newest LCD line to be profitable from the outset because it is designed to adopt multiple technologies and boost productivity.

Rosy picture
LG Electronics' global LCD television market share is expected to rise to: 15%