With prices of CDT (Color Display Tube), LCD (Liquid Crystal Display), and PDP (Plasma Display Panel) falling by up to 30% between the second and third quarters of 2004, Korean makers have been aggressively implementing cost reduction plans.

 

Samsung has adopted cross-examination of costs among various units, while at the same time simplifying production processes and standardizing of components. Such measures are planed to bring cost savings of 50% within one year. The company had also adopted Toyota's JIT (Just-in-Time) system in August 2004 to help lower inventory costs.

 

LG, pointing to oversupply of PDP, has said that PDP prices have been falling by roughly 10% to 20% each quarter. In order to squeeze costs, the company has decided to diversify supply sources to three instead of one. LG hopes the intensified supply competition will bring down component costs. LG.Philips has also implemented a plan to bring costs down by 30% per year and margins up to 30%, 20% more than competitors. The panel maker has thus instituted a committe split up into five main areas: planning, product planning, production technology, material costs, and support. The committee is charged with producing target cost plans for each product.