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Press Release

06/03/2004

LG Electronics and affiliates plan to invest 30 trillion won in electronics area by 2010

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LG Electronics and affiliates plan to invest 30 trillion won (US$25.3 billion) in electronics area by 2010

- Held a strategic meeting on the electronics business and technology at the
LG Production Engineering Research Center in Pyeongtaek
- Aims to be one of the world's top three players in electronics and
information communications by 2010
- More than double the R&D manpower in the electronics sector to 30,000
people

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- Push to aggressively expand R&D investments and manpower over the next 6 years
- Gradually increase R&D investments in electronics every year to reach 4 trillion won
(US$3.38 billion) by 2007 and over 6 trillion won (US$5.1 billion) by 2010
- Expand R&D manpower from the current 14,000 people to 24,000 by 2007 and to 30,000 by
2010
- This year, R&D investments in electronics will increase to 2.3 trillion won (US$1.95
billion), a 21% increase over 2003
- Put over 60% of total R&D investments in strategic businesses for intensive fostering
such as mobile handsets, digital TVs, and flat-panel displays
- This year sees investments worth 300 billion won (US$254 million) in new and futuristic
businesses such as home networking, car infotainment and mobile AV.
- Focus on core parts such as system IC's (core chips), camera modules, and PDP rear
panels, which serve as boosters in performance and cost competitiveness



Seoul, Korea, May 12, 2004  LG held a strategic meeting on business and technology in the electronics area at the LG Production and Technology Institute in Pyeongtaek with LG Chairman Bon Moo Koo in attendance. They discussed major businesses and technological strategies in the electronics area.

Attending the conference were 60 dignitaries including LG Chairman Bon Moo Koo, LG Electronics CEO S. S. Kim, LG.Philips LCD Vice-Chairman Bon Joon Koo, CEOs in LG Electronics divisions, LG Electronics President Paik Woo-hyun, heads of LG Electronics divisions, and heads of LG Electronics research institutes.

LG decided to invest a total of 2.3 trillion won (US$1.95 billion) in R&D in the electronics area in 2004, a 21% increase over 2003. LG will gradually increase investments every year to reach 4 trillion won (US$3.38 billion) by 2007 and over 6 trillion won (US$5.1 billion) by 2010, totaling 30 trillion won (US$25.3 billion) by 2010. LG is thus set to push to secure technological competitiveness, a source of business competitiveness and a future growth engine for the mid- and long-term view.

Also, LG is poised to further secure talented local and foreign staff in R&D to increase the manpower in the electronics division from the current 14,000 to 24,000 by 2007 and 30,000 by 2010. 

Strategies by business division

As for the mobile handset business, LG Electronics plans to reinforce its presence in the GSM market early on by using its competitiveness in CDMA and join the rank of world's top three mobile handset makers by 2007.

In the digital TV area, with the backing of world's best technologies in core chips and software, LGE is poised to aggressively expand its presence in North America and other advanced markets.

In the highly competitive display area, LG is determined to continue its leadership in PDP and LCD markets through timely investments and differentiated products. LGE has also committed itself to reinforce and retain the world's No. 1 position in display devices by activating its OLED business and securing next-generation leading display technologies.

LGE is set to expand its capabilities in home air conditioners in which it has retained the world's top spot for years in the area of home appliances, to commercial air conditioners, and foster new-growth businesses such as premium digital appliances. To this end, LGE plans to invest over 60% of its R&D costs every year in businesses for intensive fostering such as mobile handsets, digital TVs, and flat-panel displays.

Additionally LGE will invest R&D costs worth 300 billion won (US$254 million) for this year alone in new businesses including home networking, car infotainment, and mobile AV devices, as well as futuristic businesses including next-generation storage devices and parts.

Boosting its competitiveness in core parts

In particular, LG is set to share roles and reinforce cooperation among its subsidiaries, thus expanding at an early date core parts such as system IC's (core chips), camera modules, and PDP rear panels. These are the sources of performance and cost competitiveness. LG will also endeavor to reinforce its competitiveness in corresponding finished products.

An LG official said, "We shared the consensus that only core technological power can ensure a sustained growth under an uncertain management environment, and we decided to continue to put R&D investments in the electronics area with a focus on growth businesses and expand relevant manpower. The strategic meeting with top managers in attendance aimed to establish business and R&D strategies in intensively fostering electronics business, new businesses, and future businesses, to produce No. 1 products in each area."

Exchange rate: 1 USD = 1,182 KRW

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