Sony, Samsung plan $2 billion LCD line

Sony and Samsung Electronics have reached a basic agreement to build a new $2 billion manufacturing line for LCD panels, the companies said Monday.

Increasing demand for LCD televisions is behind the plans to expand operations at S-LCD, a joint venture between the two companies that currently operates an LCD production line in Tangjeong, South Korea. The new production line will be a so-called 8G (eighth-generation) line, which is one step more advanced than the 7G (seventh-generation) line that S-LCD operates.

An 8G line is capable of processing sheets of glass that measure 2 meters by 2.5 meters whereas a 7G line can accept glass measuring 1.87 meters by 2.2 meters. Several LCD panels are fabricated on each glass sheet and there are typically cost savings to be gained when starting with larger sheets of glass.

The two companies signed a letter of intent towards the new line on Monday and plan to have a definitive agreement signed by the end of June, they said.

Production at the new line is scheduled to begin in the latter part of 2007 and the plant will have an initial capacity of 50,000 sheets of 8G glass per month, they said.

The current S-LCD plant has a capacity of 60,000 sheets of 7G glass per month and is being expanded to handle 75,000 sheets per month. The 100 billion won ($97.4 million) expansion is scheduled to be complete by July this year.

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