LG. Samsung. Together? On Sunny Days!
Korea Inc. is flexing its muscle again to get a better grip on another fairly young, promising industry — solar cells – and that is bringing together two of its biggest and most competitive conglomerates, LG and Samsung. The Ministry of Knowledge Economy on Tuesday announced plans to invest 700 billion won, or about $650 million, in five emerging industries over the next two years. Such announcements are one of the vestiges of South Korea of the 1960s and 1970s, when the government controlled scarce capital and directed it into the industries that lifted the country from poverty to affluence.
This one caught a lot of attention because the ministry said part of the funds would go to a consortium composed of Samsung, LG and Dongjin Semichem to develop solar cells. (In addition to solar cells, the ministry said it would invest in pharmaceuticals, micro-energy grid, IT convergence and electric cars.) The ministry has tried to bring LG and Samsung affiliates to work together in the past, with mixed success.
Last July, it announced that different companies from the Hyundai Motor, LG and Samsung conglomerates were joining together to work on flexible displays. The government would assist the three with about 100 billion won, or about $93 million. Three years ago, the ministry began prodding Samsung Electronics Co. and LG Electronics Co. to cross-purchase liquid crystal displays from each other. At the time, officials feared that Taiwanese manufacturers were gaining ground on the two Korean firms, which are the leading makers of LCD panels.