Samsung, Sony bet on new LCD panel

SEOUL (Reuters) - A new joint flat-screen production line by Samsung Electronics Co. Ltd. (005930.KS) and Sony Corp. (6758.T) is expected to generate $2.3 billion in annual sales by 2008, producing 50-inch class TV panels, Samsung said on Tuesday.

Samsung and Sony on Friday signed a final agreement for a $1.9 billion expansion of their joint liquid crystal display (LCD) plant, S-LCD Corp., to build a next-generation TV panel line.

The production line, which uses the "eighth-generation" motherglass measuring approximately 2.2 by 2.5 meters, will begin production in the autumn of 2007, with a capacity of 50,000 panels a month.

Sales from the line would reach 2.2 trillion won ($2.3 billion) by 2008, Samsung, the world's second-biggest maker of large LCD last year, said in a statement.

Samsung's entire LCD division posted 9.7 trillion won in sales last year.

South Korea's Tangjeong-based S-LCD has helped Samsung to use Sony's brand power to expand the market for larger television panels, while letting Sony benefit from a stable panel supply.

Samsung's home rival, LG.Philips LCD Co. Ltd. (034220.KS), said last week it had delayed plans to build a similar new TV panel line on its own, after posting a record quarterly loss on falling panel prices.

The larger motherglass yields more panels, boosting productivity. The eighth-generation motherglass produces either six panels for 50-inch class TVs or eight for 46-inch TVs. It compares with the current "seventh-generation" line at S-LCD, which makes six panels for 46-inch TVs per motherglass.

Shares at Samsung, South Korea's biggest stock, fell 0.68 percent to 580,000 won by 0453 GMT, compared with the wider market's (^KS11 - news) 1.39 percent loss.

($1=956.6 won)