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Samsung, LG open new LCD factories

TV prices to come down?

Two of the world's largest manufacturers of LCD panels have started making screens at new factories, a move that should enable them to cut manufacturing costs and lead to further price reductions on big-screen, flat-panel televisions.

Samsung kicked off 2006 by commencing commercial production of LCD panels four months ahead of its original schedule, it said on Sunday. LG also started production at a new facility, it said on Monday.

Both production lines are in South Korea. Each will be capable of processing up to 45,000 sheets of mother glass – the large sheets from which LCD panels are made – per month when they reach full output. The new lines process mother glass that measures 187x220cm, from which eight 40in panels or six 46in 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 referred to as '7th-generation' glass for its size and is the largest glass yet employed by Samsung and LG in commercial production. The use of larger sheets should mean cost savings, which 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 (about £1.4bn) so far, and has plans to invest a further 1.8 trillion won (£1bn) this year to double capacity to 90,000 sheets of mother glass per month by the end of 2006. 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, alongside a similar factory that began operating in April owned by S-LCD, a joint-venture company of Samsung and Sony. 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 40in LCD panels per month.

Samsung also said on Sunday that sales in the first 11 months of 2005 had passed $10bn (£5.8bn). 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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