LG and Samsung slash Chinese LCD display investments
Wednesday, August 7, 2013/
Korean television display giants LG and Samsung are scaling back their investments in Chinese LCD display panel plants, due to a glut in supply, according to Korean press reports.
The Korea Times reports growing demand for smartphones and tablets is weakening sales for LCD display televisions which, when coupled with increasing supply from China, is causing a global glut in LCD panels.
“The investment for our first LCD panel plant will be much lower than initially planned because of an unfavourable market situation… But it does not necessarily mean that we are losing interest in the market. We will expand investment again once the market rebounds,” an LG executive said.
With 40-inch and 42-inch display panels dropping in price by 15% in the two weeks to the end of July, Samsung cut production at its display plant in Suzhou from 100,000 sheets per month to 40,000.
The company has also lowered its investment in the factory to $US1.5 billion.
“We’ve earlier planned to invest as much as $US3 billion to build the facility. But we will miss the investment plan because the global LCD market is seeing an imbalance between supply and demand and continued oversupply,” a Samsung official said.
“The problem is that the global TV industry is falling down. People shifted towards tablets and smartphones. Samsung and LG won’t increase investment until the demand for next-generation TVs such as OLED and UHD ones picks up,” said an official at the Korea Display Industry Association (KDIA).