Sony And Samsung In Talks To Build New Production Line

Samsung Electronics Co Ltd has opened talks with Sony Corp to jointly build a new, larger LCD production line that could cost $3 billion to $4 billion, the Korea Times reported on Friday. Samsung, the world’s largest maker of LCD panels, plans to start construction of the new line next year for possible production from the third quarter of 2010, an unnamed industry source was quoted as saying.

A company spokeswoman said Samsung was reviewing its next move on LCD production facilities but no decision had been made. A Sony spokesman in Tokyo declined to comment on the report. Samsung and Sony, which are the world’s top two LCD television makers, are already operating S-LCD, a joint venture that has been in operation since 2005. Samsung plans to use the largest-ever glass substrates in the new production line, the newspaper said. The new glass standard, called 11th-generation, would be larger than the 10th-generation one to be used in Sharp Corp’s new plant. Sony, keen to secure supply for an expansion in the flat-screen TV market, is set to take a one-third stake in the Sharp LCD plant, which will be completed by March 2010.

Larger LCD facilities make bigger screens and help lower costs, but makers now see an end to their race for bigger production lines as the market for very large TV sets is limited. The 11th-generation facility could produce 70-inch TV panels but few homes can afford TVs that size, analysts say.

LG Display Co Ltd, the world’s No. 2 LCD maker, is building a 1.36 trillion won ($1.36 billion) LCD line that will go into operation in the second quarter of 2009, but the plant uses smaller glasses designed for notebook panels and smaller TVs. LG Display’s chief executive, Kwon Young-soo, said earlier this week the company will also need another, larger production line for TV screens, to be completed by early 2011. Kwon said a decision on the glass size at the plant had yet to be made.

Article courtesy Reuters.