Samsung and Sony are pumping $2 billion into the expansion of a LCD manufacturing plant in South Korea. Samsung and Sony's partnership in the display arena dates back to 2004 with the formation of S-LCD Corp. The expansion would allow for the two electronics giants to boost their respective share in the large-size flat-panel televisions market by producing an additional 50,000 units per month.

Sony is expected to used the increased production capacity to boost its Bravia LCD TVs which have seen impressive sales in Japan as well as North America. Samsung on the other hand gains Sony's brand recognition to drive demand for 40" and larger LCD TVs. "Samsung and Sony have seen lots of benefits by cooperating, creating the market together and enjoying higher margins in 40-inch TV panels. They want to do it again for the bigger-sized panels through the new deal," said CJ Investment & Securities analyst Lee Min-hee.

The joint venture has been producing six 46" panels from each 1.87 x 2.2 meter 7G glass substrates. The newly expanded production line, which is expected to start production in 2007, will produce eight panels from 2.2 x 2.5 meter 8G glass substrates. Reuters reports:

Demand for large LCD panels used in personal computers is expected to rise 50 percent over the next three years, while demand for LCD panels for TVs is projected to jump more than threefold, according to research firm DisplaySearch.

Samsung and Sony's joint venture, S-LCD, is just one of two 7G facilities in Samsung's arsenal.  The second 7G fab was announced earlier this year, but has not been completed yet.  Samsung already has an 8G factory in the works as well.