Giants lured to booming Chinese LCD market

Samsung and LG Philips are building new LCD plants in China

The world's largest LCD makers are building new factories in China to serve the country's rapidly growing demand for TVs and monitors.

Samsung opened its second plant in China last week, at a cost of around $1.2bn, and hopes to double the number of LCDs it produces in the country. LG Philips also plans to build a second plant. 

"We have received construction approval for the second plant from the Chinese government, but the specific timing and size are not decided yet," an official at LG Philips LCD told the Korea Herald. 

China's LCD TV market generated sales of $4.7bn in 2006, according to figures from Korea-based display market analyst firm DisplayBank. 

Market research firm GfK Asia reported that Chinese retailers sold more than four million LCD televisions in 2006, and predicts sales to double this year. 

Sales of standalone PC monitors rose seven per cent last year to pass 730,000. Average selling prices fell slightly, however.

Although the market is growing fast, local competition is also on the rise in China. Domestic output of large-sized LCD screens grew almost 250 per cent last year, according to DisplayBank.

While foreign manufacturers have a significant technological lead, local factories with relatively advanced fifth-generation production lines churned out a record 3.5 million LCD panels in the fourth quarter of 2006, the research firm reported.

Samsung's two factories will be able to make about five million panels a year, once the new factory is at full capacity. LG Philips' existing factory makes 3.6 million panels a year.