7G Line Comparison Between Samsung and LG.Philips LCD - Who Gets an Edge?
In the TFT-LCD market, oversupply starting around June 2004 led to price drops, eventually resulting in profitable deterioration of large panel makers. Accordingly, even the industry's first tier Samsung Electronics and LG.Philips LCD experienced a zero point in operating profit. As expected by Displaybank in December last year, there is evidence that the trend of price declines has paused as of February, such as price increase news of several panel makers and rebounds of market demand. (Based on panels for 17" monitors) Driven by market rebounds in the second half of 2004, Taiwan manufacturers have invested in 5G lines tailing Samsung and LG.Philips LCD, but they are taking a cautious attitude in advancement into 6, 7G. Although 7-8 companies are accounting for almost all the portion of the worldwide large TFT-LCD market, Korea's two firms ranking first and second had already represented 22-23%, respectively, in market share last year, widening the gap with Taiwan's firms. Under this circumstance, it is obviously difficult for Taiwanese companies to invest astronomical figures in more than 6G new lines without confidence on their future. In contrast, Samsung and LG.Philips LCD, which have already consolidated their top positions in the TFT-LCD business, have pushed for promotion of new 7G lines as planned. Taiwan-based companies are no more threatening competitors and the two giants, Samsung and LG.Philips LCD, is struggling to retain the number one spot. In order to forecast the LCD market, It would be the best way to take a good look at strategies and countermeasures of Samsung going first setting up its 7G line, and LG.Philips LCD closely running after Samsung.
1. LCD 7G Line Comparison Between Samsung and LG.Philips LCD
1. Substrate Size Based on substrate size, LG.Philips LCD gains an edge by 6.8% over Samsung
2. Comparison of Product Capability - Samsung's Phase1 has production capacity of monthly 60K, while LG.Philips LCD's Phase1 has 45K and its Phase2 is scheduled to produce 45K additionally. - As investment in the S-LCD(T7-1) line is made jointly with Sony, Samsung seems to need an extra contract or agreement with Sony for line expansion. As a result, Samsung delayed the expansion of T7-1 and decided to promote investment in T7-2 prior to it. - LG.Philips LCD is expected to have capacity of 90K a month by the end of 2006 3. LG has determined a lineup of 47" in its 7G.
2. Review of Production Size
In case that sizes with a glass utilization rate of more than 80% are mainly manufactured at 7G. · The most efficient size is 40" for Samsung and 42" for LG.Philips LCD, reflecting the standardization competition between the two sizes. · LG's 32" panels are slated to be produced mostly at P6(6G).
3. Large LCD Lineup (more than 32") Comparison
Samsung, which began the 7G line business one year ahead of LG, is forecast to overwhelm LG's 37" with 40" and 46" for about one year. · After kicking off the 7G line operation from the first half of 2006, LG.Philips LCD will add 42" and 47" to the panel lineup, eventually retaining a more various lineup than Samsung. (Samsung doesn't deal with 42" and 37".) · Consequently, Samsung is highly predicted to take a difference size for T7-2 Phase2 from Phase1 and to add 37", 42" and 50" by choosing 2000X2300.
4. Production Capability Comparison of Samsung and LG.Philips LCD
1. Samsung gets an advantage until Q3'04 owing to its prior 5G supply capability.
2. LG.Philips LCD gets an advantage from Q4'04 through Q2'05 owing to an increase of 6G
3. Samsung gets an advantage from Q3'05 through Q4'05 owing to an increase of T7-1
Conclusion - Samsung Electronics and LG.Philips LCD are keenly competing with each other for the No. 1 position in the worldwide large LCD market. Samsung, which has challenged 7G (1870X2200mm) glass substrates for the first time in the world, launched the mass production in March 2005, while LG.Philips LCD has started construction of its 6G (1950X2250mm) line and plans to push for the volume production from the second quarter of 2006. Thanks to retention of the 6G line prior to Samsung, LG.Philips LCD is expected to rank world's first in capacity from the fourth quarter of last year through the first half of 2005. Afterwards, LG.Philips LCD is likely to lag behind Samsung from the third quarter of this year when Samsung's 7G line go into operation in earnest. - The competition to predominate the LCD TV market that is predicted to grow considerable in demand has been accelerated. Samsung is forecast to monopoly the market for about one year backed by the fruits of the world's first 7G line operation. Moreover, the company will concentrate on the expansion of the 40" market and market standardization. Meanwhile, LG.Philips LCD is predicted to counter Samsung's 40" with 37" until the operation launch of the P7 line. - Investment of Samsung's T7-2 line and LG.Philips LCD's P7 will be set about at similar time and the volume production is predicted to be possible around 2Q'06. T7-2 Phase1 of Samsung will go with the same size with that of T7-1as previously announced. By contrast, Phase2 is largely predicted to go with a larger size in order to produce 42" or 50" more competitively until 40" gets on the track of market standards. Likewise, LG.Philips LCD is likely to consider the size for P7 Phase2 similarly to Samsung. - During the steep competition between Samsung and LG with regard to 7G, Taiwan's AUO and CPT projects to operate 6G lines in the first half of this year and CMO also plans to begin operation of its large 5.5G line in the same period. Yet, Taiwanese LCD makers are unlikely to be threatening to Samsung and LG. The two giants are already a year and a half or two years ahead of rivals in next-generation line competition and it looks impossible for Taiwan makers to overtake the two frontrunners regarding technological conditions, investment status and customers. - Sharp of Japan kicked off operation of its 6G line early 2004 for the first time in the world and already stated investment in 8G with 2160X2400 size. However, the scale of the company's line and investment cannot reach even 50% from that of domestic makers and looks suitable for its company-exclusive line use. - Confident outlook for the large LCD industry and consequent intrepid preceding investment led Samsung and LG.Philips LCD to the top spot in this sector and the competition between the two giants for the number 1 became an engine driving Japan's competitors to lag behind naturally. The market will be fully open and the fruits will be definitely bitten by the winner. Source: OGIS GmbH, www.glassglobal.com (The foregoing information was compiled from publicly available information in reports and news releases - with courtesy www.displaybank.com )
1. LCD 7G Line Comparison Between Samsung and LG.Philips LCD
1. Substrate Size Based on substrate size, LG.Philips LCD gains an edge by 6.8% over Samsung
2. Comparison of Product Capability - Samsung's Phase1 has production capacity of monthly 60K, while LG.Philips LCD's Phase1 has 45K and its Phase2 is scheduled to produce 45K additionally. - As investment in the S-LCD(T7-1) line is made jointly with Sony, Samsung seems to need an extra contract or agreement with Sony for line expansion. As a result, Samsung delayed the expansion of T7-1 and decided to promote investment in T7-2 prior to it. - LG.Philips LCD is expected to have capacity of 90K a month by the end of 2006 3. LG has determined a lineup of 47" in its 7G.
2. Review of Production Size
In case that sizes with a glass utilization rate of more than 80% are mainly manufactured at 7G. · The most efficient size is 40" for Samsung and 42" for LG.Philips LCD, reflecting the standardization competition between the two sizes. · LG's 32" panels are slated to be produced mostly at P6(6G).
3. Large LCD Lineup (more than 32") Comparison
Samsung, which began the 7G line business one year ahead of LG, is forecast to overwhelm LG's 37" with 40" and 46" for about one year. · After kicking off the 7G line operation from the first half of 2006, LG.Philips LCD will add 42" and 47" to the panel lineup, eventually retaining a more various lineup than Samsung. (Samsung doesn't deal with 42" and 37".) · Consequently, Samsung is highly predicted to take a difference size for T7-2 Phase2 from Phase1 and to add 37", 42" and 50" by choosing 2000X2300.
4. Production Capability Comparison of Samsung and LG.Philips LCD
1. Samsung gets an advantage until Q3'04 owing to its prior 5G supply capability.
2. LG.Philips LCD gets an advantage from Q4'04 through Q2'05 owing to an increase of 6G
3. Samsung gets an advantage from Q3'05 through Q4'05 owing to an increase of T7-1
Conclusion - Samsung Electronics and LG.Philips LCD are keenly competing with each other for the No. 1 position in the worldwide large LCD market. Samsung, which has challenged 7G (1870X2200mm) glass substrates for the first time in the world, launched the mass production in March 2005, while LG.Philips LCD has started construction of its 6G (1950X2250mm) line and plans to push for the volume production from the second quarter of 2006. Thanks to retention of the 6G line prior to Samsung, LG.Philips LCD is expected to rank world's first in capacity from the fourth quarter of last year through the first half of 2005. Afterwards, LG.Philips LCD is likely to lag behind Samsung from the third quarter of this year when Samsung's 7G line go into operation in earnest. - The competition to predominate the LCD TV market that is predicted to grow considerable in demand has been accelerated. Samsung is forecast to monopoly the market for about one year backed by the fruits of the world's first 7G line operation. Moreover, the company will concentrate on the expansion of the 40" market and market standardization. Meanwhile, LG.Philips LCD is predicted to counter Samsung's 40" with 37" until the operation launch of the P7 line. - Investment of Samsung's T7-2 line and LG.Philips LCD's P7 will be set about at similar time and the volume production is predicted to be possible around 2Q'06. T7-2 Phase1 of Samsung will go with the same size with that of T7-1as previously announced. By contrast, Phase2 is largely predicted to go with a larger size in order to produce 42" or 50" more competitively until 40" gets on the track of market standards. Likewise, LG.Philips LCD is likely to consider the size for P7 Phase2 similarly to Samsung. - During the steep competition between Samsung and LG with regard to 7G, Taiwan's AUO and CPT projects to operate 6G lines in the first half of this year and CMO also plans to begin operation of its large 5.5G line in the same period. Yet, Taiwanese LCD makers are unlikely to be threatening to Samsung and LG. The two giants are already a year and a half or two years ahead of rivals in next-generation line competition and it looks impossible for Taiwan makers to overtake the two frontrunners regarding technological conditions, investment status and customers. - Sharp of Japan kicked off operation of its 6G line early 2004 for the first time in the world and already stated investment in 8G with 2160X2400 size. However, the scale of the company's line and investment cannot reach even 50% from that of domestic makers and looks suitable for its company-exclusive line use. - Confident outlook for the large LCD industry and consequent intrepid preceding investment led Samsung and LG.Philips LCD to the top spot in this sector and the competition between the two giants for the number 1 became an engine driving Japan's competitors to lag behind naturally. The market will be fully open and the fruits will be definitely bitten by the winner. Source: OGIS GmbH, www.glassglobal.com (The foregoing information was compiled from publicly available information in reports and news releases - with courtesy www.displaybank.com )
posted by C.H. Chen @ 3:10 PM
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