Subsidies Set for U.S. Flat-Panel Makers

The Pentagon unveiled a $580-million, five-year subsidy program for producers of flat-panel display screens, which are used on laptop computers and are quickly moving into a broad range of products.

With the Japanese holding 95% of the world market for such screens, the Pentagon said it is important to ensure that domestic suppliers can meet the needs of the military.

The Defense Department plans to spend $96 million in the current fiscal year and increase that to $142 million by 1998. The money will be split between basic product research and development of high-volume production.

The program represents the Clinton Administration’s boldest step to date into an industrial policy meant to ensure an adequate base to support military needs, according to Kenneth S. Flamm, principle deputy assistant secretary of defense. He said the Pentagon is generating the subsidies to ensure it access to the market.

Flamm said the goal of the program is to enable U.S. firms to build at least four large-scale, flat-panel production plants that would capture 15% of the world market.