Report: Samsung, LG to roll out LCD steppers

Oct. 8, 2008 – In further efforts to cut production costs — and reduce reliance upon Asian neighbors, notably in Japan — Korea’s top two electronics manufacturers reportedly are in early stages of collaboration on development of steppers for LCD panel manufacturing, according to the Nikkei Business Daily.

The plan is to spend 50B won (about ¥5B, or US $40-50M) on a five-year development project, with a joint development team (including engineers and equipment makers) set up at the end of October at a joint venture in Chungcheong Nm Do. Samsung Electronics will work on ultrahigh-precision control and environmental control techniques, while LG Display will offer optical and photomask systems. Mass production is planned for 2013.

About 20B won has been promised by the South Korean government, which is promoting efforts to increase domestic reliance upon foreign suppliers and reduce its trade deficit, the paper notes. Heavy reliance upon Japanese imports (Japan’s top suppliers Canon and Nikon dominate the worldwide LCD stepper market) is seen as risky to local development of LCD panel technology and production. Domestic production of steppers would lower prices of these imported tools, so the thinking goes, allowing domestic LCD makers to reinvest the money they’d save back into facilities and technology development.

The Korean rivals’ partnership also extends beyond LCD steppers, the paper notes, encompassing mutual supply of LCD panels by year’s end amounting to 40,000 panels/month (a deal forged while forming the Korea Display Industry a year ago), but is unlikely to stretch too far due to differing production technology formats. Samsung utilizes vertical alignment format for LCD drivers, the same method used by Sharp, while LG Display’s drivers are based on in-plane switching similar to Hitachi and Panasonic. Incorporating an LCD panel with a different format requires changing circuits, with additional time and labor, the paper notes.

Moreover, both Samsung and LG tend to purchase LCD parts within their own group divisions, so external transactions are smaller and require more time and patience to complete.

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