Big show

Seoul, April 10 (Reuters): South Korea’s Samsung Electronics Co Ltd and Japan’s Sony Corp have agreed to a $2-billion expansion of a liquid crystal display (LCD) plant, seeking a greater share of the booming flat-screen TV sales.

The companies already run a $2-billion joint venture, S-LCD Corp, in South Korea to produce the panels.

The expansion allows Samsung, the world’s second-biggest maker of large-sized LCD last year, to use Sony’s brand power to expand the market for larger television panels.

Analysts also have been expecting Sony, Japan’s second-largest consumer electronics maker after Matsushita Electric Industrial Co, to invest in new production capacity to secure panels for its new line-up of Bravia brand LCD TVs, which have made big strides in grabbing market share in the United States and Japan.

Panel supply was a key reason behind Sony’s rise to the top spot in LCD TVs in the fourth quarter of 2005.

“Samsung and Sony have seen lots of benefits by co-operating, creating the market together and enjoying higher margins in 40-inch TV panels,” said Lee Min-hee, an analyst at CJ Investment & Securities. “They want to do it again for the bigger-sized panels through the new deal.”

The move comes after Taiwan’s AU Optronics Corp, the third-biggest LCD maker, announced on Friday it would acquire smaller local rival Quanta Display Inc.