SEOUL (Reuters) - - Samsung Electronics Co. Ltd. (005930.KS) said the global LCD market would be difficult in the first half of 2007 due to seasonal factors, but predicted strong growth in demand and even a possible shortage in the second half.

"The first quarter is likely to be a little difficult, but afterwards, an increase in demand should mean we will not experience too many difficulties," Lee Sang-wan, president of Samsung's LCD business, said during a press conference on Friday at the company's sprawling Tangjeong complex about 100 kms south of Seoul.
"Actually, there is even the possibility of a shortage in the second half," he said in his remarks, which were embargoed until Sunday. He did not elaborate.

Samsung, the world's biggest maker of large liquid crystal display (LCD) panels so far this year, also said the company was aiming to have the latest production line of its S-LCD joint venture with Sony Corp. (6758.T) begin operations two to three months ahead of its scheduled start date of October 2007.

"Our eighth generation line could be opened earlier than scheduled, and could contribute to the Christmas shopping season," Lee said.

S-LCD, set up in 2004, currently has the capacity to make 75,000 panels a month and should reach a monthly capacity of 90,000 units a month early next year, Samsung said. LCD panels are a key component for LCD TVs.

The new eighth-generation line will use bigger glass panels, enabling makers to produce more LCD panels and boosting efficiency. Eighth-generation mother-glass substrates yield eight 46-inch TV panels or six 52-inch panels, compared with six 46-inch panels from seventh-generation glass.

While competitors such as LG.Philips LCD (0342230.KS) have posted net losses amid sliding prices, S-LCD has helped Samsung use Sony's brand recognition to expand the market for larger television panels, while letting Sony benefit from a stable panel supply.

Although there are no official breakdowns of S-LCD's financial performance, Lee said the unit, initially hampered by depreciation costs, would become profitable by the first half of 2007.

Lee reiterated Samsung's expectation that panels 40 inches and larger will drive market expansion.

"Size standards keep changing," Lee said. "The next standard is 46 inches, and by 2008 the 52-inch-and-higher panel market will grow rapidly."

On Thursday, Samsung said the market for 40-inch and larger panels would grow by 112 percent in 2007, while the 46-inch and larger segment is seen notching 253 percent growth.

Samsung is also the world's biggest memory chip maker and third-largest mobile phone manufacturer.

Shares in Samsung, the most valuable technology firm outside the United States, closed 0.49 percent lower at 611,000 won on Friday, lagging a flat wider market (.KS11).