Quanta to invest US$1bn

Quanta Display Inc (廣輝電子) said it plans to invest about US$1 billion to become the first company in Taiwan to make larger sheets of glass used in flat-panel and notebooks computers.

The venture between Quanta Computer Inc (廣達電腦) and Sharp Corp plans to install a production line capable of making panels from which 16 14-inch screens can be cut. That compares with sheets producing six screens now, said Quanta Display Chief Financial Officer Elton Yang.

"Quanta Display is racing against AU Optronics Corp (友達光電) and others in making larger and cheaper flat computer monitors," Yang said. "Companies falling behind the curve will be marginalized and eventually cast out."

AU Optronics declined to comment on its expansion plans. The world's third-largest flat-panel display maker said only that it plans to sell at least NT$23.8 billion (US$688 million) worth of shares to finance future projects.

Quanta also competes with South Korean rivals Samsung Electronics Co and LG.Philips LCD Co, the two largest makers of flat-panel displays. LG.Philips said it will become the first to operate a so-called fifth generation plant producing the larger screens in April of 2003. Samsung said it plans to begin mass production at its new facility in October.

Quanta Display said it will install its new production line in October and start commercial production by the middle of June next year.

The company also said it plans to raise as much as US$500 million selling shares overseas in addition to a NT$15 billion (US$434 million) bank loan to finance the expansion, Yang said.

Sharp, Japan's largest maker of liquid-crystal display screens, earlier estimated the industry will ship more than 25 million flat panels this year, up from about 15 million units a year ago. An increase in demand also means higher prices, which have gained about a third since last year, Yang said.

In the second half, Quanta Computer plans to sell as many as 2 billion shares in Quanta Display for the first time to local investors, the company said in a statement.