May 27, 2003 in Social Responsibility News

SAMSUNG Electronics Announces 7th-Generation TFT LCD Glass Substrate

Seoul, Korea- May 27, 2003: Samsung Electronics Co., Ltd., the world’s largest provider of TFT- LCD display panels, today announces the glass substrate for its future 7th-generation TFT LCD line. A 1,870mmx2,200mm glass will be adopted for maximum efficiencies as the demand for large size LCD-TVs and monitors are growing. With the glass substrate set, Samsung will be finalizing the plan for the new line. Details such as the input capacity and capital investments are to be set.

Samsung’s new 7th -generation line will be located at a 2million m2 (21.3million f2) site at Tangjung, Asan in Korea. The site preparation work is nearly completed. The new line will be used to produce LCD screens for 19” and 21” monitors as well as 32” and 40” larger size panels for LCD TVs.

Samsung is scheduled to start up its second 5th-generation LCD substrate line in the second half of this year. The subsequent start-up of the latest 7th-generation line will solidify the company’s leading position in the TFT-LCD industry.

Significance of the 7th generation glass substrate

First, the introduction of the 7th -generation substrate was to secure an advantage in the competition over standardization, which is predicted to grow even more severe in the days ahead. Previously, companies battled for supremacy between 13.3” and 14.1” screens for notebook PCs and between 17” and 18” screens for desktop monitors. Samsung has maintained market initiative in introducing market standard 14.1” and 17” screens.

Samsung plans to advance directly into the 7th-generation, skipping the 6th -generation. The battle over standards in the LCD TV market is also expected to intensify. The 6th-generation substrate is efficient for producing 30” screens, but productivity declines sharply when fabricating 40” models. On the other hand, the 7th-generation size is efficient for both 30” and 40” sizes.

The 7th-generation fabrication line can yield twelve 32” screens or eight 40” screens per substrate, which is between 1.5 and 2 times more efficient than the 6th-generation line. This means the 7th-generation size offers a competitive advantage over the 6th-generation size in the LCD TV market. Moreover, the time difference in implementing either of the new sizes is virtually nonexistent. The 6th-generation lines are forecast to start up at the end of next year, while 7th- generation lines are can be introduced by early 2005,at the earliest. Thus, only a couple of months difference is expected.

Second, Samsung predicts a major improvement in LCD price competitiveness in the flat screen display market by adopting the 7th-generation fabrication line. Experience shows that production costs in the TFT-LCD industry fall 20-30% each time a larger substrate size is adopted.

Importantly, the full-fledged market for large screen displays will be formed in 2003, and digital broadcasting is scheduled to start from 2005, fueling rapid market growth. However, price competitiveness is still the most important factor. The 6th-generation line ensures excellent productivity for 30” screens but not 40” ones. This limits the ability of LCDs to compete with PDPs in the large-screen market. By contrast, the 7th-generation LCD line is expected to out-compete PDPs in terms of product cost for 40” models as well.

Third, Samsung’s decision to move directly to the 7th-generation substrate, which is about three times larger than the 5th-generation substrates, demonstrates Samsung’s confidence in production technology. The TFT-LCD fabrication process has become far more difficult as substrate sizes increase. Companies that lack confidence in their technology have difficulty in adopting the larger substrates. Samsung’s first 5th-generation line initiated last October will be on schedule to reach a monthly input of 100,000-glass this July.

Samsung Electronics adopted a 5th-generaton line, and Taiwanese makers followed suit. Some of these companies adopted the very same 5th-generation line that Samsung uses, showing they strongly believe in Samsung’s technology. Samsung’s decision to move to the 7th-generation substrate may spur a new trend in TFT LCD production. The 1,870mm x 2,200mm size is a highly probably market standard for next-generation TFT LCD manufacturing lines.

Finally, the Chonan district in Korea is emerging as the “Mecca” of the global LCD industry. Samsung Electronics started up a 3.5-generation line there in 1998, followed by the introduction of a 5th-generation line last year. Currently, the company is operating three LCD fabrication lines at Chonan. Now, a new complex is being built at a neighboring location, Tangjung, Asan. The Chonan TFT LCD industry belt takes shape with Samsung-Corning’s glass production lines at Chonan, Sumitomo’s advanced 5th-generation color filter production at its Korea subsidiary at Pyeongtaek and other TFT LCD components in the region.

The continued concentration of TFT LCD-related facilities, from glass to finished product, will greatly contribute to the synergy efficiencies for joint success.

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