Samsung Electronics Co, the South Korean consumer electronics giant, plans to dramatically cut prices for its liquid-crystal-display (LCD) televisions next month on improving costs after opening a cost-effective flat-panel plant recently, a company official said yesterday.
Samsung has found it difficult to grab a significant share of Taiwan's LCD television market, where local brands such as Teco Electric and Machinery Co (
Taiwan market
"The price competition is too intense here," Y. S. Jeon, president of Samsung Electronics Taiwan Co, said yesterday. "We can't compete with local TV vendors in terms of cost as we have extra tariffs to pay."
But things are changing.
With a supply of cost-saving LCD screens after ramping up a seventh-generation (7G) plant, Samsung now seems to have more leeway to bring down its LCD TV prices.
"We plan to lower our TV prices to a level similar to that of local brands, after launching our new TV sets in early October using panels made by Samsung's 7G fab," Jeon said.
For TV makers, flat panels are key to minimizing their outlays as they account for over 50 percent of the manufacturing cost.
Samsung plans to slash its price for mainstream 32-inch LCD TVs to around NT$69,000 (US$2,100) per unit, which is the price now asked by popular brand Panasonic for televisions with similar specifications, according to Jeon.
That would represent a price decrease of nearly 20 percent, compared to the NT$84,900 price tag that 32-inch Samsung LCD TVs retail for now.
Cost savings
"Samsung's 7G fab is relatively cost-effective in producing 32-inch panels compared with the 6G plants operated by local panel makers," said Katherine Chou (周慧娟), an analyst with researcher Market Intelligence Center (市場情報中心) based in Taipei.
Glass substrates made by a 7G production line can be cut into 12 32-inch TV panels, compared to the eight panels cut from a smaller glass substrate made by 6G fabs, Chou said.
Samsung's 7G plant is focused more on producing 40-inch and 46-inch LCD TV screens, she added.
But, Samsung is not planning to introduce 40-inch LCD TVs into Taiwan in the near future, Jeon said.
Revenue Targets
Home appliances including LCD TVs accounted for about 15 percent of Samsung's local branch's total revenue last year, according to Jeon.
The percentage would remain steady this year, he said.
Samsung aims to sharply increase revenue at its Taiwan branch to NT$10 billion, Jeon said, with a big chunk of the total coming from its mobile-phone business.
Jeon did not provide figures for last year.
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