LCD TV tempts the little guys

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LCD TV tempts the little guys

Decktron Co., which makes multifunction remote controls and MP3 players, is building a 3,960-square-meter (1-acre) liquid crystal display television factory in Ochang Industrial Complex in Cheongwon, North Chungcheong province. The company invested 2 billion won ($1.67 million) in the new plant; it will complete the factory by the end of this year and produce 5,000 televisions per month from early next year. “We expect to earn 25 billion won, half of the company’s total sales, by selling the LCD televisions,” said Oh Choong-gee, Decktron’s president. Several other smaller manufacturing companies are trying to enter the LCD television market. About 20 such firms have already started producing LCD televisions and the number is expected to exceed 50 by next year. The rush contrasts with the cathode ray tube television market, where only a few large electronics companies are left as consumer tastes shift. Etronics Corp. will sell 17.1-inch LCD televisions under the Inkel brand in Korea beginning in the middle of this month. “We expanded our business to video because there was a limit to expanding the company only with our existing audio and communications businesses,” said Baek Ho-seong, a director at the company. “We are going to produce 32-inch and 42-inch LCD televisions next year.” Humax Co, a digital set-top box manufacturer, started selling 17-inch and 30-inch LCD television sets with digital tuners in September. In addition, monitor manufacturers, digital graphic card companies and electronic component companies like Sigmacom Co., Erae Electronics Industry Co. and Wooyoung Co. are producing or plan to produce LCD televisions under the brand names of its customers. These smaller firms all expect LCD television demand to soar, and industry sources generally agree that global demand for such televisions, which are lighter and much thinner than cathode-ray-tube television sets, could grow to 30 million units by 2007 from this year’s 4-million-unit demand. Computer companies such as Dell and Gateway have also begun to sell LCD televisions under their brand name. These smaller firms also say that the manufacturing process for LCD televisions is simpler than that for the older, bulkier television sets. Therefore, they say, they can go head-to-head with larger manufacturers without a huge and costly expansion of their manufacturing plants by simplifying their distribution chain. But not everything is going their way. The cost of the display panels makes up about 80 percent of the price of a finished LCD television, and small firms often lack the financing to buy them in bulk. They must bid against firms with deeper pockets for their share of the limited supply. “It is difficult for smaller manufacturers to buy TFT-LCD panels for cash; companies who cannot overcome the problem will be left out of the competition,” Mr. Oh at Decktron said. by Kim Sang-woo
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