Samsung, LG Expand Their Lead in LCDs Electronics.

In late years, Korean, Taiwanese, and Japanese makers of liquid-crystal unveil panels have fought alcoholic to secure dominance in the humour tech market. And for most of 2007 and 2008 there was wealth of dealing to go around. Today, though, the budgetary calamity is slashing outcry for the panels, used in flat-panel TVs, computer monitors, and cell-phone screens. While that's appropriate to misery Dick in the battle, the anticipate the downturn to play out to their advantage. "This challenging interval will give us a good break to widen our lead," says Lee Bang Soo, a vice-president at , the world's second-largest LCD panel maker after its compatriot. The Koreans are already gaining.

Manufacturing costs today overextend what producers can sortie for the panels, so Taiwan's four biggest makers have slashed harvest by half or more. AU Optronics (), the boss in Taiwan and the wide-ranging No. 3, commonplace its vend interest for panels bigger than 10 inches risk to 11% in November, from 19.2% in January, while apportion for Taiwan's hew to 9%, from 12%, says demand researcher . Samsung, meanwhile, increased its share in in the cleave by 8.5 share points, to 32.5%, during the period, and LG jumped 3.1 points, to 23.5%. One big interest the Koreans use to advantage is their great ties with TV vendors. Samsung runs an LCD-panel dump jeopardize with Japan's Sony (), giving it a address conduit to the world's two hottest TV brands. Samsung and Sony together had 42% of the deal in for in the third location of 2008, DisplaySearch estimates.

LG Display is the immediate supplier for two of the three other prime TV brands: its parent, LG Electronics, and Philips, which has a 13.7% post in LG Display. (Japan's , the outstanding greater competitor in LCD TVs, makes its own panels.) "Vertical integration with significant set makers is quickening for us," says Samsung Vice-President Kwon Gye Hyun.

Panel Potential As a result, Taiwanese LCD-panel makers have been relegated to selling to smaller brands and playing a backup post for the bigger brands. That means their orders get canceled in the first place when markets shrink. LCD TVs explanation for well over half of all LCD consumption and mirror a one of a kind in the consumer electronics vigour in the near future. Researcher forecasts the universal LCD TV peddle will escalate to $101 billion in 2012, from $61 billion in 2007. While the Taiwanese own the Koreans are extending their lead, they respond the crusade is far from over.

They're counting on their rather vehement capacity in emerging markets and phrase they will maintain to provide in initiatives that will type their operations more efficient. "AU is fascinating this possibility to whet its marrow competence," Andy Yang, a accounting vice-president at AU Optronics, wrote in an e-mail. "In addition, our R&D [department] is actively continuing the circumstance of unknown technologies." Still, the Taiwanese have to contend with a shaky Korean currency that continues to aide Samsung and LG.

While Taiwan's currency was nearly overthrown against the U.S. dollar in 2008, the Korean won plummeted almost 26% against the greenback, making Korean exports far cheaper. "If the Korean won stays weak, the Taiwanese won't have any incidental to achieve first place back their share," reckons Henry Wang, customary proprietor at Taipei-based researcher WitsView, which specializes in splash devices.

A potentially bigger complication is a dilly-dally in investing in next-generation play technology. Samsung and LG are the only ones planning to pitch unusual plants this year effectual of churning out panels bigger than 52 inches, occupied for big-screen TVs. Taiwan Premier Liu Chao-shiuan said on Dec. 25 his oversight would serve the island's LCD diligence condition the far-reaching recession. Yet analysts estimate any bailouts won't consider troubled Taiwanese companies to assemble renewed plants costing at least $3 billion each.

"They can't be able to scenario for anything else but their survival now," says Lee Hak Moo, vaunt analyst at brokerage in Seoul. "The Koreans are tranquil to gain their lead.".

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