Chi Mei gets NT$41.2 billion loan for new factory

Chi Mei Optoelectronics Corp (奇美電子) has secured a NT$41.2 billion loan from a syndicate of 33 banks that it will use to build a new, more efficient manufacturing plant, the company said in a statement yesterday.

The new manufacturing facility will be used for the company's expansion in its upcoming "5.5 generation" fab, the company's fourth, it said.

"The amount of the syndicated loan boasts of the largest one in the high-tech sector in recent years," said Chi Mei's vice president Jack Lin (林榮俊). "Members of the syndicate comprise local banks and insurance companies as well as several foreign banks based in Taiwan."

Chi Mei, the nation's second largest manufacturer of panels for flat-screen displays and televisions, started construction at the new facility in the second quarter of last year.

The Tainan-based company now plans to move in manufacturing equipment in the third quarter of this year and start production of panels at the beginning of next year, according to the company.

In addition to the 7-year syndicated loan, Chi Mei has, since last year, completed several capital-raising operations, including local rights offerings and issuance of European convertible bonds (ECBs) and global depositary receipts (GDRs).

With more than NT$100 billion in fresh capital generated thereby, Chi Mei hopes to become the world's leading TFT-LCD manufacturer, the company said in the statement.

As the global economic turnaround takes hold, other panel makers such as AU Optronics Corp (友達光電) and Chunghwa Picture Tubes Ltd (中華映管) have invested in building next-generation fabs for an increased demand for flat panels used for monitors and notebook computers as well as for flat-TVs.

Chi Mei president Ho Chao-yang (何昭陽) told an investor conference in November that the company has targeted to grab 20 percent of the global large-sized LCD panel market in 2004. Demand for pricey LCD-TVs may soar to about 10 million units this year from 4.9 million units last year, he estimated.

The company will probably double its total screen output this year, helping increase 2004 sales to about NT$150 billion (US$4.4 billion), a Chinese-language newspaper said. Chi Mei's sales last year rose to NT$62 billion from NT$60 billion in 2002.