Korea: Samsung, LG Pioneer Move to 7th Gen Fabs

Korea’s big two panel makers—Samsung and LG—are at the forefront of moving production into 7th Gen fabs. Even as their Taiwan rivals begin large-scale production on 6th Gen facilities, the Korean companies’ move is sure to up the stakes in the LCD panels battle. The move to 7th Gen helps these companies compete effectively in the market for bigger sized LCD TVs. “We cannot relax our rampup if we are to meet the rising demand for big LCD panels,” says an LG Philips spokesman. The strongest demand is from 32-inch LCD TVs and 15- to17-inch monitors, he adds.



The tight supply of LCD panels is expected to result in higher prices. Makers say demand for 15- to 17- inch monitors is causing prices to reverse their earlier downtrend. Most makers say demand is expected to rise sharply in time for the Christmas buying season. “This is pretty good time for us,” says a senior manager with LG Philips LCD. According to a manager with Samsung Electronics LCD Business Unit, “The only concern right now is how to secure raw materials to feed our ramp-up.”



Korean companies believe they can retain a competitive advantage over their Taiwan rivals by moving into the larger screen sizes. The technology gap between Korea (which has three vendors with 19 fabs) and Taiwan (which has five vendors with 24 fabs) for LCD panels will narrow in 2006 when the two 7th Gen fabs of Samsung Electronics LCD Business Unit and LG Philips enter into volume production.



Samsung Electronics was the first to move to 7th Gen fabs. The company demonstrated its 45K substrate capacity in its 7th Gen fab in May this year. Commercial production is expected to begin by end of this year. “As long as the demand keeps rising, we will probably put another 45K substrate capacity later this year,” says Song Chull-Gyu, a spokesman for Samsung Electronics LCD Business Unit.

Demand for smaller screen sizes is driven largely by the mobile phone sector. Boe Hydis Technology converted one of its three lines from notebooks and monitors to making smallersize displays for the mobile market. “This line will grow to full production of one million units a year on a glass substrate basis by the end of this year,” enthuses Kwon Oh-Jung, a representative of Boe Hydis Technology.



Boe has entered into an agreement with a medical monitoring end-user, World Innovation Display Engineering, for its technology termed AFFS. “AFFS (Advanced Fringe Field Switching) gives us an edge in new areas such as medical and aerospace products,” says Kim Dong-Geon, sales VP of Boe Hydis. AFFS technology allows the screen to be turned 180 degrees in all directions. AFFS is increasingly being used in niche applications such as medical and aerospace.