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Large electronics makers are in a fierce battle to dominate the emerging market for digital television sets. Tactics include better features and bigger screens at unprecedented prices.

Korea's LG Electronics, Inc., parent company of Zenith, announced June 26 that it would step up production at its Mexican factories in an attempt to become the top supplier of digital TVs for the North American market by the year 2005. LG's Mexican production lines will be expanded from five to seven by the end of this year, with three of the lines converting to manufacture digital TVs.

LG said it will reduce production of analog TVs and will expand production for liquid crystal (LCD) and plasma displays (PDPs). New for this season are 40", 42", and 60" PDP monitors and high definition digital TVs. The company is pumping about $200 million into promotional efforts for North America, with hopes of claiming up to 15% of the market within the next three years, an LG official said.

LG has also entered a joint venture with Dutch electronics giant Royal Philips Electronics to produce flat-panel television sets. On June 24, the partners announced an investment (known as P5) of more than US$1 billion to expand production capacity to boost the worldwide supply of flat screen TVs and large-format desktop monitors. The joint venture goes by the name of LG.Philips LCD.

The announcement follows the opening of the world's first fifth-generation thin-film transistor liquid crystal display (TFT-LCD) manufacturing factory last month. The new investment (P5) will enable production in the first half of 2003, with LG.Philips LCD producing 120,000 fifth-generation sheets per month over the next few years, further consolidating its position as the world's largest supplier of TFT-LCDs. Larger screen sizes for television applications and desktop monitors are likely to drive demand, which is expected to grow from 30.9 million units in 2002 to 104.9 million units in 2006.

"The P5 investment reflects the growing demand for larger panel LCDs, especially in the high-growth LCD TV market," commented Matt Medeiros, chairman of the joint venture board, and president and CEO of Philips Components. "Our expansion efforts will further position us as the large-screen TFT-LCD leader and enable us to meet customer demands for a full lineup of displays in all sizes, ranging from 15" to over 30" wide screens for premium monitor and TV usage," noted Bruce Berkoff, LG.Philips LCD's executive vice president of marketing. "Furthermore, P5 reinforces LG.Philips LCD's ongoing commitment to drive the industry by setting standards and continuously pushing the technology envelope."