Samsung 2006 Annual Report Download - page 46

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36
New growth drivers for steady expansion
We were mainly involved in the production of LCD panels for use in notebook PCs in
the 1990s. After the turn of the 21st century, Samsung expanded into display panels
for desktop monitors. Growing demand for various mobile products (mobile phones,
game consoles, PDAs, MP3 players and so on) prompted us to branch out into
the development, production and sale of various small and medium-sized displays
starting in 2001. In the future, the display business is predicted to see steady growth
with the full-blown market for large-screen LCD TVs, IT business expansion and
mobile product diversification.
A top LCD producer
We are the world’s largest maker of LCD panels used in IT products (mainly
notebook PCs and desktop monitors) and flat panel TVs. Our aggregate production
of TV panels broke the 10 million mark just 17 months after the first 7th-generation
production line (processing the world’s largest motherglasses to date) went into
operation. We have led the standardization of flat panel TV market as well as
the trend toward larger screen sizes. Today, Samsung is unrivalled as the top maker
of LCD TV panels 40˝ and larger.
Exhibiting leadership as the undisputed LCD market champion
The LCD business undergoes cyclical price fluctuations as the supply and demand
go in and out of balance. For the near future, steady growth is forecasted for LCDs
used in IT products (mainly notebook PCs and desktop monitors). The spread of
digital broadcasting and development of full-HD technology are also expected to
drive the growth of the LCD TV market.
The LCD market continues to spread beyond IT applications, with increasing
sales of LCDs used in mobile products such as mobile phones, game consoles
and PDAs. The supply base for LCD TV panels is also expanding, led by Samsung
Electronics, and we continue to upgrade the performance of our products in this
segment.
The world’s highest sales revenue in large-screen TVs for five
consecutive years
In 2006 we began mass producing the largest (70˝) commercialized LCD to date.
We have also leveraged our 7th-generation production capability to maintain our
leadership in large-sized (at least 40˝) LCD TV panels. We have maintained
the highest global share of this product segment since 2002.
LCD panel sales reached KRW25.4 trillion in 2006, more than any other
manufacturer. According to DisplaySearch, the world’s top seven display makers
averaged around 20% year-on-year sales growth in 2006, while our sales rose by
33% during the same period. Moreover, the gap between first and second place in
global LCD sales more than doubled from some US$1.27 billion in 2005 to US$3.67
billion a year later.
We completed test runs at our second 7th-generation LCD production
line (L7-2) in November 2005 and started up full operation in 2006. This line is
dedicated to producing panels for large-screen (mostly 40˝ and 46˝) TVs. Meanwhile,
we continue to develop high-performance LCDs of ever-larger panel sizes. We
completed the world’s first 70˝ full-HD LCD with 120Hz operating speed in 2006, and
commercialization is set for the first half of 2007.
We have taken advantage
of our 7th-generation lines to
secure an unrivalled position
at the top of the market for
LCD TVs with screen sizes
of 40˝ or more. In 2006, we
continued to achieve the
highest sales revenue among
the world’s LCD makers.
Net Sales (in trillions of KRW)
Operating Profit
(in hundreds of billions of KRW)
06
10.9
8.7
05
6.0
8.4
0605