SEOUL, South Korea LG Group will realign its thin-film transistor (TFT) LCD business to attract foreign investment and ramp up display production.
The Korean conglomerate said recently it will integrate operations within its LG Electronics and Semicon businesses to form LG LCD as a subsidiary of the Electronics unit. LG will bankroll the new company with $550 million in capital and said it expects production levels to reach 2 million units in 1998. Production of 13.3-inch TFT LCDs is expected to jump to 4.5 million units in 1999, the company said.
LG Group disclosed that its Semicon unit will transfer TFT LCD assets totaling $1 billion to LG LCD. The funds will be raised through a stock offering and disposal of other assets, LG said. The move is expected to reduce LG's debt-to-equity ratio by nearly a third to less than 200 percent by the end of 1998.
LG also said the integration plan is designed to attract foreign investment to the TFT-LCD market sector, which is growing at an annual rate of 225 percent.
LG's push into LCD production follows predictions earlier this year by U.S. industry watchers that Korean companies would delay expansion plans in the face of production overcapacity and a credit crunch brought on by a weakening currency.
Exclusive to EE Times by Chom Dan Inc. (Seoul, South Korea).