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Management Insight - profit swings Since 2000 LCD makers...

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Management Insight Rebecca Ellis/iStockphoto. Building a new factory to produce 50-inch-plus TV screens can cost $4 billion at a time when prices for flat screens are tumbling. Now the makers of those giant liquid- crystal displays are wondering whether such investments are worth the gamble. If LCD makers decide to hold off on building new factories, price declines for wide-screen TVs could slow in two or three years as production falls behind added consumer demand. Experts also say a slowdown in factory building could also bring welcome relief for the
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industry by reducing its volatile
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Unformatted text preview: profit swings. Since 2000, LCD makers have been on a nonstop construction binge, building new factories to produce the latest generation of screens arriving every 18 months or so… . Now, with the eighth generation of screens, the cost to build new factories is higher than ever—running between $3 billion to $4 billion each. And this generation of factories is optimized for screens measuring 50 inches or more diagonally, which so far is a much smaller potential market than that targeted by previous screen generations....
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