" Ten Trillion Market! " All-Out Preparations

As the US Federal Communications Commission on August 8 determined to make the US television manufacturers stick a digital tuner on all televisions which are newly produced until 2007, the Korean TV exporters attempt to make provisions.

The North American Digital TV to be newly created is estimated at RKW 10 trillion for 5 years. LG Electronics and Samsung Electronics plan to expand the production facilities.

▽US TV market into the Digital 〓At that day, FCC decided to stick the digital tuner on the over 36 Inch TV until July 1, 2004, on 25∼35 Inch TV until July 1, 2005, and on 13∼24 inch TV until July 1, 2007. This decision will be soon executed through Congress voting.

It is forecasted that all household TV will be changed into the digital TV until 2007 through this decision. Gim Yeong-Yun, the executive director of the video strategy marketing team, Samsung Electronics said “It is forecasted that 30,000,000 digital televisions will be purchased in the North America for the coming 5 years. Supposing that one unit is USD 2,500, there will be the new market of total USD 750 billion (KRW 10 trillion).”

▽Capture the Digital TV Market of KRW 10 Trillion 〓 Philips, Sony, Samsung Electronics and LG Electronics will compete severely to occupy the market through the decision of FCC.

LG Electronics will be the greatest beneficiary of the decision, because ‘Zenith’, local affiliate of LG Electronics has a source technology of the digital tuner. ‘Zenith’ will receive the loyalty by 5 dollars per 1 digital TV receiver to be sold in USA in future, and then will obtain the additional incomes of USD 0.1 billion per annum.

At the beginning of the year, LG Electronics planed to inject USD 90 million to LGERS that is an advance base of the North American market until 2005, and to extend the digital TV production line to 12 lines. However, LG Electronics is currently reviewing the measure that makes the plan earlier. LG Electronics explained “When this plan is completed, LG Electronics can product the 3,000,000 digital televisions per year and raise the market share up to 15%”.

Samsung Electronics also took steps toward preparatory works such as the meeting to make provisions against the change on the North American market. The officials of Samsung Electronics said “Samsung Electronics has currently occupied the market share of over 10% in the North American Digital TV Market, being first, second or third. It will plan to execute the offensive marketing as it ha the world-top competitiveness in the fields of LCD TV and PDP TV.”

Joong-Hyun Park sanjuck@donga.com