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LG.Philips Displays ups production of slim CRTs

Company is increasing production of thin CRTs as it looks to compete against makers of flat-panel televisions.

Tech Industry
Looking to fend off the emergence of popular flat-panel sets, leading CRT maker LG.Philips Displays is bumping up production of its thin cathode ray tubes for use in televisions.

LG.Philips on Tuesday announced plans to produce 32-inch CRTs in its Gumi, South Korea, manufacturing plant and 21-inch tubes in Nanjing, China. The company already makes 21-inch tubes at its Durham, England, manufacturing facility.

CRTs are the main component in traditional television sets. Sets with the slim tubes were introduced in Europe earlier this year.

The slim sets are about 14 inches thick, which represents a 30 percent reduction from older CRT technology. Based on positive consumer feedback, the company will expand its slim CRT-manufacturing efforts by introducing 28-inch and 29-inch tubes at a later date, according to the company.

LG Electronics, Skyworth, Thomson, Mivar and Schneider Electronics are among the manufacturers who will use the slim tubes. LG.Philips Displays estimates that shipment of the tubes could reach a million by 2005. Sets using the slim tubes are not expected in the United States until late next year.

Company representatives were not immediately available for comment. LG.Philips Displays is a joint venture of LG Electronics and Royal Philips Electronics.

While CRT-based TVs make up 90 percent of the market, offer better picture quality and cost significantly less than flat-panel sets, the sleek profile and bigger screens of LCD- and plasma-based sets are garnering more attention than CRTs, making them a prized gift this holiday season.

Thinner margins and a highly competitive market, along with the appeal of higher profits in the emerging flat-panel market, has caused a shrinking and consolidation of the CRT market.

The thinner CRTs aim to take some of the luster away from flat-panel televisions. The move to thinner CRTs is meant to attract consumers who want a thin television but find current flat panels too expensive. CRT makers also benefit from lower prices. Flat panels tend to carry a heavier premium than CRTs for a number of reasons.

Manufacturers are hoping to use slimmer sets and lower prices to extend the life of the CRT market, which isn't on the way out by any means. Analysts estimate that even by 2008 70 percent of TVs shipped will be based on CRT technology.

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