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Press Release - LG Electronics

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Press Release - LG Electronics Powered By Docstoc
					Embargo until
May 30, 2007, 11:00 AM (KOREA Time)
May 30, 2007, 04:00 AM (POLAND Time)


              LG Opens European LCD Cluster in Poland
 -    Europe’s first one-stop LCD manufacturing system, from components to TVs
 -    Expected to become European hub for the digital display production and boost
      LG’s presence in the European LCD market

Seoul, Korea, May 30, 2007 – LG.Philips LCD, LG Electronics, LG Innotek and LG Chem
(collectively “LG”) today held an opening ceremony for its European LCD cluster in Wroclaw,
Poland, the company’s third LCD cluster worldwide.
Approximately 500 people attended the complex’s opening ceremony, including LG executives,
Polish government officials, journalists and citizens. Elżbieta Dorota Wilczyńska, Polish Deputy
Minister of Economy; Wojciech Szelągowski, Vice President of PAIiIZ (Poland Agencja Informacji i
Inwestycji Zagranicznych S.A.); Rafal Dutkiewicz, Mayor of Wroclaw; and Ryszard Pacholik,
Mayor of Kobierzyce Commune were the guests of honor. Also in attendance were Bon Moo Koo,
Chairman & CEO of LG Corp.; Yong Nam, Vice Chairman & CEO of LG Electronics; Young Soo
Kwon, President & CEO of LG.Philips LCD; James Kim, President of LG Electronics Europe and
Simon Kang, CEO of LG Electronics Digital Display Company.
A total of 807 million euros is expected to be invested in this 1.5 million-square meter scale
cluster until 2011, including 429 million euros from LG.Philips LCD, 103 million euros from LG
Electronics, 58 million euros from LG Innotek, 40 million euros from LG Chem and 177 million
euros from partner companies. Until now, these companies have created approximately 4,200
local jobs in total.

Combined Efficiencies
LG’s Poland cluster, in Kobierzyce near Wroclaw, will help it to better serve its customers in
Europe where the LCD market accounts for 37 percent of the global LCD TV market. LG will
incorporate a one-stop manufacturing system, allowing LCD products and components to be
produced and assembled at a single location. This includes everything from TFT-LCD display
materials from LG Chem and invertors/power modules from LG Innotek to LCD modules made by
LG.Philips LCD and finished LCD TV sets from LG Electronics.
“We are excited about enhancing the economic collaboration between Poland and LG, which
began in 1999 when we first started our TV plant in Mlawa,” said Yong Nam, Vice Chairman and
CEO of LG Electronics, “With this highly efficient one-stop manufacturing system, we can
provide faster response to regional customers and markets while increasing competence in cost
and price. As the demand for LCD TVs is increasing more rapidly in Europe than any other region,
the Poland cluster will play a core part in LG’s overall LCD-related businesses. Now, with five
major LCD manufacturing strongholds strategically placed around the globe, we are in a better
position to achieve our goal of being the industry’s world leader.”
Piotr Grzegorz Wozniak, Minister of Economy added, “Development of the LCD TV and monitor
manufacturing sector in Poland in recent years has been unusual on a European or even world
scale. The creation of this LG cluster in Wroclaw – the third such venture in the world - is
further proof of how important our role is in the European market. According to a Ministry of
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Economy estimate, between 35 and 38 million monitors will be produced in Poland by 2010. It’s
not an exaggeration to say that we are now the pathway to Europe for this industry.”
“We are proud that is currently the largest LCD manufacturing Centre in Europe. Thanks to LG’s
investment, other foreign companies have also decided to build their factories in our
community,” said Ryszard Pacholik, Mayor of Kobierzyce Commune.
LG chose Poland for the country’s advantageous geographic location, competitive workforce,
established infrastructure and the high level support of the Polish Government. Centrally
located within Europe and well-connected by infrastructure, Wroclaw guarantees LG’s ability to
quickly supply any corner of the European market. Wroclaw, the nation’s educational and
economic center, is also well-known to offer a trained high quality labor force and to have well
established infrastructure, including efficient road networks and excellent power supply. The
synergies created by LG’s leading LCD production technologies and Poland’s various advantages
will make LG’s LCD cluster in Poland a European hub for the digital display production.

Each Company’s Role in the LCD Cluster in Poland
LG’s Poland cluster will help achieve synergistic gains through collaboration among the four LG
companies.
LG Electronics’ LCD TV set assembly plants, measuring 396,696 square meters, have a planned
capacity of 2.4 million units in 2007, expanding to 10 million units per year by 2011. The
company produces Full HD LCD TVs in 37, 42, 47, 52 and 55-inch sizes as well as 32-inch HD TVs.
This cluster will play a critical role in supplying the European LCD market, which as of March
2007 accounted for 26.6 million units annually and 37 percent of the global market. (Source:
DisplaySearch, March 2007). The company plans to overtake the European market by increasing
brand investment and cultivating specialized sales forces, as well as expanding high-end goods
distribution channels and strengthening its partnerships with pan-European dealers. The
company will enhance its competency in Europe through differentiated, localized marketing
programs and country-specific R&D strategies for the UK, France, Germany, Italy and Spain.
LG.Philips LCD’s LCD module plant in Poland, measuring 661,160 square meters, has a planned
initial capacity of 3 million LCD modules annually, expanding almost four-fold to 11 million
modules by 2011. The company started mass production at the plant in March, this year and is
producing LCD modules mainly for 32-inch and larger LCD TVs. Many of LG.Philips LCD’s
customers have already built or are building facilities in the region and through the
establishment of a base in Poland, the company has been able to secure a strong foundation for
mutual growth with its customers in the fast-growing European LCD TV market. Through local
production, the company plans to provide services tailored to the needs of its various customers,
offering a timely and stable supply of optimized products and services.
LG Innotek will produce and supply invertors and power modules, both of which are also major
components of LCD, covering 46,281 square meters in the cluster.
LG Chem manufactures a wide range of products from petrochemical goods to rechargeable
batteries and TFT-LCD display materials, critical for LCD manufacture. The company’s
estimated annual production capacity of polarizer in the Poland cluster is 3 million sets. The
scale of the company’s plant in the cluster measures 92,562 square meters.

LG’s Other Strategic LCD Production Clusters
LG has been strategically implementing to build the optimized global LCD production system to
better serve its customers around the world and has created two other LCD clusters prior to
launching the LCD cluster in Poland. Its two other LCD clusters are located in Paju, Korea and


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Nanjing, China. Three of LG’s LCD clusters in Korea, China and Poland collectively cover 8
million square meters.
LG is confident to grow its LCD cluster in Poland to be the European digital display production
hub by using its successful experience running the clusters in Korea and China. LG will boost
cooperation among these three clusters by working on cooperative projects in new technology
development, purchasing system integration and talent sharing.
The Paju Display Cluster, covering 4.5 million square meters in total, is the largest digital
display cluster in the world. The section of the complex for LG.Philips LCD covers 1.7 million
square meters. It is home to LG.Philips LCD's seventh generation LCD panel plant which is the
largest in the world. Approximately fifty of LG.Philips LCD's upstream and downstream partner
companies will eventually become part of the cluster, including four LG companies: LG
Electronics, LG Chem, LG Innotek and LG Micron.
The Nanjing Display Cluster in China, covering 2 million square meters in total, includes
LG.Philips LCD’s first overseas LCD module plant and facilities for LG Electronics and other
components manufacturers. The Nanjing cluster also features plasma display module and TV set
plants.
LG expects to enhance its leadership in the industry through the synergistic effects achieved by
its Poland LCD cluster, now one of the most important strongholds in the company’s entire
business.
                                                  ###

About LG.Philips LCD
LG.Philips LCD Co., Ltd [NYSE: LPL, KRX: 034220] is a leading manufacturer and supplier of thin-film
transistor liquid crystal display (TFT-LCD) panels. The Company manufactures TFT-LCD panels in a wide
range of sizes and specifications for use in TVs, monitors, notebook PCs, and various applications.
LG.Philips LCD currently operates seven fabrication facilities and four back-end assembly facilities in Korea,
China and Poland. In addition, LG.Philips LCD has sales and representative offices in ten countries and has
approximately 23,000 employees globally. Please visit www.lgphilips-lcd.com for more information.

About LG Electronics
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics,
home appliances and mobile communications, employing more than 82,000 people working in over 110
operations including 81 subsidiaries around the world. Comprising four business units - Mobile
Communications, Digital Appliance, Digital Display and Digital Media with 2006 global sales of US $38.5
billion - LG Electronics is the world’s largest producer of CDMA handsets, air conditioners, optical storage
products, DVD players.
LG Digital Display Company is the largest flat panel display manufacturer in the world, a leading producer
of LCD and plasma TVs and one of the world’s top plasma module makers. While focusing on creating well-
designed, feature-rich TVs, the company is also pushing technological boundaries to create a more exciting
viewing experience. LG’s product areas include: televisions and computer monitors, plasma display panels,
OLED and others. LG was an official sponsor of the just-completed 60th Cannes Film Festival, where . For
more information, please visit www.lge.com.

About LG Innotek
LG Innotek, Ltd. is a global market leader in the manufacture and sale of key electronic components and
modules in the areas of digital information-based Mobile telecommunications, Displays, Networks and Car
electronics. LG Innotek produces a variety of products include: LCD modules, LEDs, Camera modules,
Power modules, Digital Tuner and Wireless Communications module. With a solid background in developing
high quality, innovative solutions while anticipating market expectations, LG Innotek is consistently
delivering core technology for the future. The company continues to pioneer the development of next
generation products for applications such as Telematics and RFID. For more information, please visit
http://www.lginnotek.com.

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About LG Chem
LG Chem, Ltd. is a leading chemical company in Korea in terms of both size and performance. It is a
vertically integrated chemical company that manufactures a wide range of products from petrochemical
goods to high-value added plastics and high performance industrial materials. LG Chem’s expertise also
extends to high-tech materials for electronics and information technology such as state-of-the-art
rechargeable batteries and display materials. For more information, please visit http://www.lgchem.com.



CONTACT:

LG.Philips LCD Co., Ltd    Sue Kim          +822 3777 0970            sue.kim@lgphilips-lcd.com
LG Electronics, Inc.       Judy Pae         +822 3777 7144            lgpr@lge.com
LG Innotek, Ltd.           Kyung Suk Baek +822 3777 0077              ksbaek@lginnotek.com
LG Chem, Ltd.              Tracy K. Park    +822 3777 3589            kijungzzang@lgchem.com




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                                               Appendix

Table 1. LG’s Poland LCD Cluster


                                              Facility Size
              Company                    (unit: square meters)                      Major Products

                                                                       LCD TV modules
  LG.Philips LCD                                            661,160    (3,000,000 annully)

                                                                       LCD TV sets
  LG Electronics                                            396,696    (2,400,000 annually)


  LG Innotek                                                 46,281    Inverters and power modules

                                                                       Polarizer
  LG Chem                                                    92,562    (3,000,000 annually)




Table 2. Global LCD Market (Source: DisplaySearch)



    Units in million                            Global LCD Market

       40.0                                                                   36.0

                                                                              33.0
                                                    27.0
       30.0                                                                                Europe
                                                                              26.0         North America
                                                    22.0                                   China
       20.0                                                                                Japan
                          8.8
                                                    9.4
       10.0                   5.6
                              4.2                   6.9                       8.6
                              1.5
        0.0
                       2005                      2007                      2010          Year



  * The Size of Global LCD Market:
    21 million units in 2005 → 72 million units in 2007 → 128 million units in 2010




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Table 3. LG’s Three LCD Clusters



                            The Paju Display Cluster

                        •Size: 4.5 million square meters
                         - LG. Philips LCD currently covering: 1.7
                        million square meters
                         - Facilities of LG Electronics, LG Chem,
                           LG Innotek and LG Micron to be added
                        • Products
                         - LCD panels and modules
                         - LCD PDP TV materials, components and
                        sets

                                                                                     Supply LCD Panels

Supply LCD Panels                                                    -One-stop manufacturing system

-More efficiency in                • Core components
general logistics and                manufactured in
supply                               Paju Cluster                      The Wroclaw LCD Cluster
-Faster response to                • Sets assembled in
regional customers                                                   • Size : 1.5 million square meters
                                    Nanjing Cluster and
                                                                     • Products
                                    Wroclaw Cluster                   - LCD modules and TV sets
                                                                      - Polarizer, inverter and tuner



       The Nanjing Display Cluster

      • Size: 2.0 million square meters
      • Products                                    Enhanced collaboration with
       - LCD module
       - LCD and Plasma TV sets
                                                        partner companies
       - Polarizer



                                 Three Global LCD Clusters in
                                   Korea, China and Poland




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