Sep. 27, 2009 (The Korea Times) -- By Kim Yoo-chul
Top executives at Samsung Electronics and LG Electronics have painted a positive outlook for their key businesses for the remainder of the year, citing a rising demand for consumer electronics in developed markets.
The top decision-makers have cut worries over falling profits in the third quarter due to the won's recent gain against the greenback, and raised the possibility of building additional production lines.
"We plan to build a new AM OLED screen line in South Korea, next year. We will do more according to the market situation. The market for AM OLED screens is growing steadily," Kang Ho-moon, president of Samsung Mobile Display (SMD), told The Korea Times, last week.
Regarding the supply-and-demand cycle for next-generation flat-screens, Kang said the market has been on the "right path" thanks to increasing demand for screens for mobile devices, including cellphones.
SMD is a 50-50 joint venture between Samsung Electronics and Samsung SDI. The South Korean company is the virtual leader in active-matrix OLED displays, which are suitable for pricey and high-end mobile phones with features such as multimedia content.
The SMD plan is in line with Samsung Electronics' AM OLED-focused mobile phone strategy, according to managers at Samsung Electronics. Samsung is heavily pushing AM OLED-embedded mobile phones on the local market to gain a "first-mover" advantage.
Overseas, the world's second-biggest mobile phone maker has released its Linux-based, AM OLED screen-equipped LiMo phone via Vodafone. (NYSE:VOD) SMD exclusively supplies AM OLED panels to Samsung Electronics.
SMD officials expect the market for AM OLED displays to grow 10 percent in 2012 and 30 percent in 2015 as the screens will be used for a growing number of digital cameras and low-cost netbook PCs.
Meanwhile, Choi Gee-sung, chief of Samsung Electronics' consumer products unit, declined to comment on a question regarding a sales target of 1 million light-emitting diode (LED) backlight-based LCD TVs this year
LG Electronics, which is currently engaged in a cross-purchasing deal with Samsung, has also joined the ranks of those with an upbeat outlook.
But a top executive of LG's home-entertainment unit denied the possibility of further partnerships with Samsung in flat-screens.
"The won's recent gain against the greenback won't significantly hurt profits for LG's TV business in the third quarter. Meanwhile, foreign currencies are moving with little volatility. LG is positive about achieving this year's sales target of 17 million LCD TVs," Kang Shin-ik, president of LG Electronics' TV business, said.
"The demand for consumer electronics in developed markets is fair. But it seems highly unlikely that LG's TV business will grow over 10 percent in terms of sales for the third quarter from the previous quarter," the executive said.
LG has no plan to buy TV panels from Samsung Electronics, as Samsung is seeing a shortage in glass substrate due to rising demand from TV set makers, resulting in panel prices enjoying a recent bullish trend.
"The possibility of purchasing LCD panels used in TVs from each other is currently low. I doubt there will be any expansion of the cross-purchasing plan as Samsung's LCD business has a glass shortage," Kang said.
From this month, Samsung is buying more than 40,000 17-inch monitor LCDs a month from LG, while LG is purchasing 40,000 22-inch monitor panels from Samsung under the cross-purchasing deal sealed in August.
The deal is expected to replace LCD imports from Taiwan and improve South Korea's trade balance by about $83 million.