Fabricating flat panel displays requires high level technology and capitals to build and equip a fab. Thus this young flat panel business had not been easy for new entrants to enter...
The TFT-LCD business has shown the cyclical industry pattern. Along with the cycle of upturn and downturn, profits have risen and fell. The cycle of the flat panel display industry is called the “crystal cycle.” Although the industry was relatively young, it had demonstrated the cyclical character with distinct upturns and downturns. These fluctuations presented a unique opportunity for new entrants to penetrate the entry barriers during a downturn, which was extremely hard to get in, otherwise.
The Korean screen makers entered the TFT-LCD business during downturns and took advantage of resource availability in this period.
The two Korean firms, Samsung and LG effected the entry during the second downturn in 1995-1996 although Samsung started the TFT-LCD business in the early 1990, generating no revenue for the next 5 years; other Taiwanese firms entered during the third and fourth downturns...
Both Samsung and LG enabled to acquire the needed technology to build panels in the first downturn in the FPD industry in 1993-94 without licensing...
As was the case in the semiconductor sector, timing in terms of entering business or investing was very critical in the flat panel industry. Accordingly the screen makers had to make strategic bets regarding timing and investment scale for fab capacity. Samsung did it successfully...
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