Sony, Samsung in Talks to Build Second Joint LCD Plant

With so much National pride in Samsung and the high-tech industry in general, the original announcement of joint ventures between Samsung and Sony roused some interesting spurs of discussion a few months ago. Now they're upping the game - I wonder how Koreans feel about this - in a way losing their homogenous identity in the process of globalization, by getting in bed with Japan in such a major way and losing their economic sovereignty. (Or, have they lost it way back already and this is really not such a big deal after all?)

(DSL)

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Sony, Samsung in Talks to Build Second Joint LCD Plant
Nikkei Net Interactive
January 26, 2006

TOKYO -- Sony Corp. and Samsung Electronics Co. are set to begin negotiations on the construction of their second joint-venture LCD panel plant, in an effort to meet surging demand for LCD televisions.

The two are expected to spend a total of roughly 300 billion yen on a new plant in South Korea. This plant will likely be designed to handle eighth-generation glass substrates and begin operating in 2007.

Sony and Samsung established their LCD joint venture, S-LCD Corp., in South Korea in April 2004, with each contributing 100 billion yen in capital. S-LCD opened a 300 billion yen production facility and started fabricating LCD panels from seventh-generation glass substrates the following April.

Using eighth-generation glass substrates improves production efficiency because 15 32-inch LCD panels can be made from one eighth-generation substrate, compared with eight panels from one seventh-generation glass substrate. Eighth-generation glass substrates also allow more efficient production of 50-inch-class LCD panels.

The final amount invested in the second joint-venture plant may change as Japanese and Taiwanese competitors also boost their production capacities.

For example, Sharp Corp. , the biggest rival of Sony and Samsung in the LCD panel business, recently announced that it will make an additional 200 billion yen investment in its Kameyama No. 2 plant by 2008 for the plant's handling of eighth-generation glass substrates.

In addition to the construction of a second plant, Sony and Samsung are considering jointly developing LCD panels, combining Sony's know-how in improving image quality and Samsung's expertise in mass production.

Their current partnership only covers producing LCD panels at S-LCD using Samsung's technologies.

Sony and Samsung announced in November an additional 10 billion yen investment in S-LCD's production facilities to lift monthly output capacity from 60,000 seventh-generation glass substrates to 75,000 from July 2006. Even with the increased output, however, demand from Sony and Samsung is expected to outstrip S-LCD's supply within this year.