Samsung Electronics reportedly plans to offer to make DRAM investments in China in order to speed up the China government's evaluation of its panel investment plans, according to sources from panel makers.
Samsung has offered not only to make DRAM investments, but also to give up subsidies from the China government for the LCD plant project, the sources said.
However, Taiwan-based DRAM makers are skeptical about the rumors saying such an investment plan is unlikely to happen in the near future.
Korea panel makers are worried that their competitiveness in the China market will be undermined by the tightening relationship between their Taiwan rivals and China's TV vendors, the sources said.
Samsung is also considering setting up an 11G panel production plant in Korea in order to expand its gap with competitors and strengthen its position as the top LCD panel maker worldwide, the panel industry sources noted.
AU Optronics (AUO) has already submitted an application with the Taiwan government for a project to build an advanced LCD panel fab in China, with mass production scheduled for 2011.
LG Display (LGD) is to invest US$1.33 billion to set up a 8G plant joint venture in Guangzhou, China with local TV vendor Skyworth. LG Display is expected to have a 70% stake in the join venture, and Skyworth 10%.
Meanwhile, Chimei Innolux Corporation (CMI) is likely to unveil a project to build an 8G plant in Sichuan, western China.
But sources from the DRAM industry commented that Samsung would stand little chance of obtaining permission to operate a DRAM fab in China unless it is willing to open the project to investment from the local government. The sources also pointed out that Samsung would need the Korea government's approval to export its DRAM technology to China.
The South Korea government in December 2009 approved the applications by Samsung and LG Display (LGD) to set up LCD plants in China, in view of the region's potential role as the world's largest LCD TV market in the coming years.
Samsung's more cautious attitude towards DRAM capacity expansion in 2010 provides further evidence that, in the short term at least, it is unlikely to build a DRAM fab in China, according to the sources. The chip vendor tends to protect its profits generated from the DRAM segment by focusing on development of advanced technologies and product value.