Visually Speaking

Having completed his silver jubilee with the company, Choi can truly be

referred to as a ‘Samsung veteran’. He joined Samsung shortly after he

graduated from Seoul National University in 1977. He became the sales office

manager in 1985 and is now the global head of the company’s bechmark visual

display wing. He talks about the Indian market, its high points and the

shortcomings, and plans for the future

On global LCD trends…



Sitting in India, one does not feel the heat in the Liquid Crystal Display (LCD)
market. Globally, this is the hottest aspect of the visual display segment. Last

year, the LCD market was estimated to be around 14 million units. This year, the

sky is the limit. We think we can sell as much as we produce. The industry

expects 100% plus growth rates in the coming years. The LCD monitor market leads

the pack accounting for over 95% of the total demand. But a few years from now,

we hope to see an equal demand from non-IT products like TVs and handhelds.

On production being stunted despite the healthy opportunity...



Investments. Technology is not an issue today, but finance is certainly a

problem. To build a world-class factory, the investment required is close to a

billion-dollars. Since returns are expected only after a year and half, the

company would need to have strong financial support. And this does not come

easily today. Most of the monitor manufacturers have been experiencing huge

losses for some time now. Besides, we are making decent profits at current

prices, but others continue to grope with their losses. However, with the

expectation that prices will go up further, some of the international players

are now evaluating fresh investments. But that will take some time.

The scenario in the CRT monitor space…



Unlike in India where the15 inch Cathode Ray Tube (CRT) display has become

the standard, the 15 inch CRT is fading out in other countries and the 17 inch

is taking over as the defacto industry standard. However, the 15-inch LCDs will

gain popularity in the years to come. And this is the trend among retail

consumers and corporates as well. If one considers the economics associated with

LCD and CRT monitors over a period of five years, the total cost of ownership

for the LCD is much less compared to the CRT. This, after considering a host of

factors like efficiency, strain to the user, maintenance and other costs like

energy and air-conditioning. Japan is a good example of this and we expect the

other markets work along the same trend. While notebooks account for nearly 40%

of the total PC’s shipped, the rest of the systems are bundled with flat

displays.

Even though IDC estimates indicate that LCD sales will increase, CRT sales

will still be greater by 2005. However, we are definitely seeing a reversal of

the trend.

LCD in the non-IT segment…



If the third generation in mobile phones takes off, it would open up a huge
market. The demand for different handsets will increase manifold. However, the

demand will continue to be driven by the IT market. For example, one notebook

panel equals 30-40 mobile phones’ display panels. We see the convergent LCD TV

as the next big growth area for us. Given the fact that we manufactured 22.5

million monitors and 11.5 million TVs, a LCD TV at the right price could see the

opening of a huge market.

Expectations from the Indian market…



India is a growing market and we are committed to this part of the world.
Samsung’s investments are a reflection of the importance of the Indian market.

Given the low IT and monitors penetration, there is no dispute regarding the

potential. And we are ready for the same. We have already set up a plant in

Noida with an initial investment of $10 million. The plant has a capacity of 1

million units in the first year of operations catering to the domestic Indian

market. Subsequently, the capacity of the plant will be enhanced to 4 million

units by the year 2005, with additional investments of $ 25 million.

On India becoming the monitor hub for Samsung…



The straight answer is no. Compared to our other South East Asian

manufacturing locations, India does not offer adequate infrastructure to drive

exports. We see high logistic cost, poor turnaround time, higher customer

clearance time and other associated cost as a key deterrent for making India an

export haven. In any other South East Asian country, it would take about 30-35

days for the complete production cycle, from sourcing to manufacturing to

shipping out to be completed. In India, it would take about 80-90 days. That

certainly does not give a cost advantage to the manufacturer. So, exporting out

of India in the near future can be ruled out. But we certainly expect Indian

manufacturing operations to take care of the demand emanating out of neighboring

countries like Nepal and Bangladesh.

Yograj Varma in New Delhi