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October 20, 1998 in Social Responsibility News

TFT-LCD Market Rebounds

Seoul, South Korea - October, 20, 1998 - The TFT-LCD market had experienced a supply glut and falling prices in recent years. However, that period is now over, as supply is no longer capable of keeping up with demand. Prices have stabilized, and the soaring value of the Yen in Japan has boosted exports from Korea. Korea's three TFT-LCD producers, which hold a 25% share of the world market, have received a flood of new orders in the second half of this year, and their performance is poised for a new growth surge.

Samsung Electronics holds the top share of the world market (17%) for TFT-LCDs. The volume of new orders at Samsung has exploded, and the company's three production lines are now working round the clock at full capacity. Samsung's TFT-LCD output is now at least three times higher than it was in the beginning of this year.

Samsung Electronics completed its No. 2 Plant at Chonan early this year, the facility is capable of producing the latest substrate size of 600mm by 720mm. Moreover, the most popular size of TFT-LCDs for notebook PCs is now 13.3". As a result of these developments, Samsung's share of the world market has risen dramatically. The company's success has been attributed to bold investments and an aggressive management approach in anticipation of changing market trends.

Market analysts such as DisplaySearch predicted that world supply and demand would balance out by the end of this year and that the supply glut would be eliminated in 1999. However, demand has already overtaken supply in the second half of this year. Now, demand is expected to be 10% higher than supply next year, and the lack of supply is forecast to be even worse in the year 2000.

Prices for TFT-LCDs have also stabilized. In October, 12.1" models was sold for between US $230 and US $240, while the price for 13.3" models have been in the US $350-US $360 range. These prices are also expected to edge up by the end of the year.

The ongoing glut in the TFTt-LCD market appears to be gone. Factors contributing to the turnaround include rapid growth in the notebook PC market, with the emphasis being put on multimedia products that are easy to carry around. At the same time, consumers are increasingly demanding notebooks with larger screens, and demand continues to rise for TFT-LCD desktop monitors. The market for information devices continues to diversify, while Korean and Japanese makers have been slow to invest in new production facilities. This has brought about a drop in supply capacity and eliminated the glut.

In early 1997, a 12.1" TFT-LCD sold for between US $600 and US $700, but the prices had dropped to just US $250 by the beginning of this year. On the other hand, demand for notebook PCs increased, spurred by the release of Windows 98 and the introduction of Pentium models.

Meanwhile, notebook PC buyers now prefer models with 13.3" or 14.1" screens rather than the smaller 12.1" screens. The market for desktop TFT-LCD monitors was 300,000 units last year, but this year it has soared to at 1.3 million units.

Raising the panel size by even one inch will greatly influence production capacity related to the amount of glass used. For example, a 550mm x 650mm substrate can yield six 12" TFT-LCD panels but only four 13" panels, cutting overall output by one third.

TFT-LCDs are a key component for portable information and communications products, but the growth rate of the notebook PC market began to slow. Therefore, Japanese and Korean TFT-LCD makers curtailed or delayed their investment in new production facilities. Recent increases in the demand for notebook PCs, particularly those with larger screens, has resulted in a shortage of panel production capacity.

Japanese TFT-LCD makers are now expected to greatly increase their production capacity, but the sluggish Japanese economy and the strong Yen currency are posing hardships on them. This has given Korean producers a competitive advantafge, and their sales are expected to continue growing.

In Samsung Electronics Co., Ltd., there are three main business units:
- Multimedia & Home Appliances
- Semiconductors
- Information & Telecommunications.

Samsung Electronics Co., Ltd., a US $13 billion (1997) flagship company of Korean-based Samsung Group, is a world leader in electronics, with operations in more than 50 countries and 75,000 employees worldwide. For more information, please visit our website: http://www.samsungelectronics.com

Jenny Chung
Overseas PR
Corporate Communications
Samsung Electronics Co., Ltd.
Seoul HQ, Korea
Tel. 82-2-727-7692 / 7821
Fax. 82-2-727-7826

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