Press Release

05/05/2004

LG Electronics Holds a Groundbreaking Ceremony for A3, its 4th PDP Line

- Aiming for an additional monthly capacity of 120,000 units from a $568 Million USD investment

- Aiming for an additional monthly capacity of 120,000 units from a $568 Million USD investment
- A3 will serve as the foundation for LGE in becoming the world's No.1 PDP manufacturer by 2005
- The 3rd line (A2), which began operations in April, will increase its monthly capacity to 100,000 PDPs, by producing 4 panels from a single sheet of glass

Seoul, Korea, May 3, 2004 --LG Electronics (CEO: S.S. Kim, 066570.KS) is moving to pour out yet another massive investment into PDP modules, further reinforcing its position in the PDP market.

With strong confidence in the PDP market, LGE is determined to concentrate its company-wide core capabilities in building A3, its 4th PDP line, which will be capable of producing 120,000 units monthly requiring an investment of $568 Million USD.

On May 3rd, LGE held a groundbreaking ceremony for A3 in its Gumi Display Workplace. Attending the ceremony were ten LG personnel including LG Chairman Bon-Moo Koo, LGE CEO S. S. Kim, LGE President Nam K. Woo, and other LGE presidents.

With its investment A3, LGE will be able to reinforce its PDP market presence and secure a powerful driving force in grabbing the world's No. 1 position by 2005.

For the first stage of A3, to be constructed on a 125,620m2 site, LGE will invest $568 Million USD by the second quarter of 2005. Afterwards, to respond flexibly to the fast-growing PDP market, the company plans to gradually move into the second and third stages.

A3 has the capacity to open 2 more additional lines in the future. As to when LGE will invest into these lines will depend on future PDP market conditions.

When the first stage of A3 is completed, producing a monthly capacity of 120,000 units, LGE will attain the world's top PDP capacity with a monthly capacity of 285,000 units (refer to below table).

In particular, LGE is striving towards fostering A3 as the industry's most competitive and sophisticated line, as the line will be equipped with a mass-production system capable of producing 6 panels from a single sheet of glass (the world's first technology of its kind), in addition to other innovative technologies and processes.

In the meantime, LGE has begun to put A2 (its 3rd line), into full operation with a monthly production capacity of 75,000 units based on the technology of producing 3 panels from a single piece of glass. A2 was constructed in the second quarter of 2003 from an investment of $281 Million USD. LGE likewise is set to boost A2's capacity to be capable of manufacturing 100,000 units monthly by applying the technology of producing 4 panels from a single piece of glass by yearend.

With the PDP TV market entering a full-swing growth stage, the demand base of PDPs is ever growing in line with digital TVs becoming popular, and the PDP module industry continues to expand facility investments. As such, with a price competitiveness secured, the global industry sees a demand surge to 4 million units in 2004 and 13 million units by 2007. The industry saw a demand of 1.7 million units last year (refer to Table 2).

On the strength of its enhanced capacity and price competitiveness, LGE is pushing to boost its 17% global market share (2003) to 30% by 2005 in order to capture the first spot, as it continues to put facility and R&D investments into its PDP business, which has now served as its cash cow.

LGE Digital Display and Media President Woo Nam-kyun said, "Our investment in A3 will enable LGE to solidify its leadership in the global PDP market. We will continue to boost facility and R&D investments, aggressively drive marketing campaigns, and further upgrade our PDPs to be equipped with the world's top technology, product power and brand power."

Note: A1 (1st & 2nd lines), A2 (3rd line), A3 (4th line)


[Table 1] Outlook of worldwide PDP production capacity �@
Unit: K/monthly 2002 2003 2004 2005
LG Electronics 30 65 165 285
Samsung SDI 27 130 250 250
Matsushita 30 50 90 150
FHP 30 50 50 100
Pioneer 16 26 56 56
NEC 40 56 56 56
source: TSR and industry data (based on year-end production capacity) �@

[Table 2] Outlook of worldwide PDP sales
Unit:K 2003 2004 2005 2006 2007
1,700 4,000 7,000 10,500 13,000
source: Industry data

[History of LGE's PDP investment]

A. PDP business status
i. History
- '93: Commenced the development of PDP
- '96: Installed a pilot line
- '97: Developed 40-inch PDP
- '98: Developed 50-inch and the world�fs first 60-inch
- '99: Began to sell 40-inch PDP TVs
- 2001: Operated PDP No. 1 line (in March, a monthly capacity of 30,000 units)
- 2003
A. Operated PDP No. 2 line (in September, a monthly capacity of 35,000 units)
B. Developed 71- and 76-inch PDPs and K/K PDP
C. Forged a strategic alliance in PDP R&D with Thomson
D. Established a PDP module plant with an annual capacity of 240,000 units in Nanjing, China
E. Second quarter of 2004: Operated PDP line No. 3 (initially, a monthly capacity of 75,000 units)

ii. Investment results and plan
- PDP line No. 1 (30,000 units/month): $171 Million USD
- PDP line No. 2 (35,000 units/month); $115 Million USD
- PDP module plant in Nanjing, China, (LGENP): $ 65 Million USD
- PDP line No. 3 (initially, 75,000 units/month): $281 Million USD
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