LG Group Chairman Koo Bon-moo, third from right, joins Paju Mayor Ryoo Hwa-sun, third from left; LG Chem CEO Kim Bahn-suk, fourth from left; Gyeonggi Province Governor Kim Moon-soo, fifth from left; and LG Innotek CEO Heo Young-ho, right, at a groundbreaking ceremony for the company¢®?s upcoming LCD glass substrate and LED plant in Paju, Gyeonggi Province, Wednesday. / Korea Times

By Kim Tong-hyung
Staff Reporter (Korea Times)

LG Group plans to spend about 4 trillion won (about $3.34 billion) on a major plant for making liquid-crystal display (LCD) glass substrates and light-emitting diodes (LEDs) in Paju, Gyeonggi Province.

The new, 840,000-square-meter manufacturing facility, which will begin producing LED components and materials next year and LCD glass in 2012, will be critical in LG’s plans to exploit the sharply increasing demand for next-generation display and lighting technologies, company officials said.

“The success of display industries and other areas in information technology and electronics depends on a strong foundation in the materials and components industry,” said Kim Bahn-suk, chief executive of LG Chem, during a groundbreaking ceremony of the site Wednesday.

The event was also attended by LG Chairman Koo Bon-moo, LG Electronics Vice Chairman and CEO Nam Yong, LG Innotek CEO Heo Young-ho, LG Display CEO Kwon Young-soo and Gyeonggi Province Governor Kim Moon-soo.

“LG is determined to develop Paju into the heart of the country’s materials industry, which will be the key to improving national competitiveness,” said LG Chem’s Kim, adding that the new Paju plant will generate about 4,500 new jobs.

LG Display, LG’s LCD unit, already has an LCD cluster in Paju, where it runs two factories, one a seventh generation (G7) plant and the other an eighth generation (G8) line, the result of a 9 trillion won investment.

LG Chem, the country’s leading chemical producer, will invest around 3 trillion won into the new Paju plant through 2018 to establish seven manufacturing lines for LCD glass substrates, the building block of LCD televisions. LG Innotek, the LED-related subsidiary, will invest another 1 trillion won through 2012.

“The new plant will allow LG to establish a one-stop manufacturing solution for next-generation technologies, including research and development, components and equipment, and LCD panels,” said an LG executive.

“LG Chem and LG Innotek will produce the glass substrates and LED components and materials such as LED backlight units (BLUs), while LG Display produces LCD panels at the LCD cluster. The mass production of LCD glass substrates and LEDs will allow LG to establish a stronger position in the components and materials industry and also improve its competitiveness in displays and mobile phones.”

Korean companies had relied on a handful of foreign makers to secure LCD glass substrates, which account for about 20 percent of the price in manufacturing LCDs. LG Chem had been focusing on acquiring core technologies to jump into the lucrative market.

LG Chem, which already has solid business models in LCD polarizers and rechargeable batteries, expects that LCD glass substrates will prove a lucrative third piece, and hopes to generate 2 trillion won from the business by 2018.

The company will begin construction later this year, establish its first manufacturing line by 2012, and complete its third line by 2014.

LG Innotek will use the new facility to produce LED BLUs and lighting components, with the first products to be rolled out next May. The plant will eventually boost the company’s production capabilities of LEDs by four times the current level, said the company, which plans to generate 1.5 trillion won in LED revenue and acquire 10 percent of the global market in LED packages by 2012.

The clear focus is on LED BLUs, which will be used in the large-size LCD televisions and monitors produced at LG Display’s LCD cluster.

hkim@koreatimes.co.kr

http://www.koreatimes.co.kr/www/news/biz/2009/09/123_52381.html