Samsung Electronics Co, the world's largest liquid-crystal-display (LCD) maker, and its nearest rival LG.Philips LCD Co began mass production at their newest plants ahead of schedule to meet demand for televisions.
Mass production at Samsung's 4.1 trillion won (US$4.1 billion) 7-2 manufacturing line, which was due to begin in April, started on Sunday, the Suwon, South Korea-based company said in a statement. Seoul-based LG.Philips said its new P7 plant began yesterday, also earlier than planned.
The factory openings highlight optimism by TV and screen producers that sporting events this year such as soccer's World Cup will spur sales.
Japan's Sharp Corp, the world's largest LCD TV-set maker, said last month it would expand production capacity by about 10 percent as early as March.
"This reflects the leadership they have in the industry and it's positive for their stock prices," said Song In-ho, who helps manage US$400 million at Kyobo Investment Trust Management Co in Seoul.
"Samsung and LG.Philips will expand their lead on other flat-panel makers," Song said.
Samsung shares closed unchanged at 659,000 won, while LG.Philips' shares climbed 1.8 percent to 43,700 won in Seoul yesterday.
The 64 matches at the World Cup in Germany starting on June 9 may draw an average 500 million viewers, according to FIFA, soccer's ruling body. The Winter Olympics in Torino, Italy, start next month.
Global LCD TV sales are poised to rise 39 percent to US$33 billion next year and plasma TVs are predicted to climb 14 percent to US$14 billion. That will outpace the 5 percent increase in overall TV sales this year, according to estimates by researcher Isuppli last month.
Glass-tube television sales are poised to shrink 15 percent to US$35 billion next year, according to El Segundo, California-based Isuppli.
Samsung plans to spend 1.8 trillion won upgrading the 7-2 line, which can cut up 45,000 glass sheets a month, to double the plant's manufacturing capacity by the second half of the year, according to the firm's statement.
LG.Philips spokeswoman Sue Kim said the start of mass production was ahead of schedule, without saying by how much.
The Seoul-based company earlier forecast that it would begin this quarter.
Production capacity at the LG plant will reach 45,000 glass substrates during the third quarter of this year and climb to
90,000 during the first quarter of next year, LG.Philips said in its statement.
Sharp, which in October raised industry projections for LCD TVs, plans to increase monthly capacity of glass sheets to at least 56,000 by as early as March, from 51,000 now, executives involved with the plan said last month.