Samsung And LG Form Flat Panel Alliance

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As the plasma market crashes Samsung and LG both Korean Companies have formed a partnership to protect their interests in the flat panel TV market.

The two biggest players in Korea’s electronics industry, Samsung and LG Group, have formed an alliance to shore up their flat panel display companies. The two corporations will enhance their competitiveness by cross-licensing patents, purchasing parts from each other and cooperating in research and development.


Four manufacturers — Samsung Electronics and LG. Philips LCD from the liquid crystal display (LCD) sector, and LG Electronics and Samsung SDI from the plasma display panel (PDP) sector — founded the Korea Display Industry Association (KDIA) at the JW Marriott Hotel in Seoul.

Lee Sang-wan, the chief of Samsung Electronics’ LCD division, was selected as the KDIA’s first chairman. “Cooperation is essential to protect our display industry from established Japanese firms and fast-rising Chinese firms,” Lee said. “The association will play a central role in raising the scale of the parts and equipment market to more than W100 trillion (US$1=W924).” Kwon Young-soo, CEO of LG. Philips LCD, was selected as the vice chair. “The two corporations will share the results of research and development and promote cross-purchases of our products,” Kwon said.

 
The Ministry of Commerce, Industry and Energy (MOCIE) said that optical parts for LCDs, organic light emitting diodes (OLEDs) and other projects for joint R&D will be selected in August in consultation with the government.

The two electronics giants also agreed to buy panels from each other. The association will select the kind of panels that will be cross-purchased next month with a view to starting the purchases in the second half of the year.

The moves are seen as a way to battle aggressive competition by Japanese rivals and alliances among Japanese and Taiwanese companies. Japan’s Sharp Electronics and Taiwan’s Chi Mei Optoelectronics (CMO) and Chunghwa Picture Tubes agreed to share patents last year.

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