Southern Taiwan becoming hub for flat-screen panels

Southern Taiwan could develop into the nation's primary manufacturing area for the panels used in flat-screen TVs in light of expansion plans by companies such as Chi Mei Optoelectronics Corp (奇美電子) and HannStar Display Corp (瀚宇彩晶).

Chi Mei, Taiwan's No.2 liquid-crystal-display (LCD) panel maker, confirmed yesterday that it plans to rent 300 hectares of land adjacent to Southern Taiwan Science Park (南部科學園區) in Tainan, said Loreta Chen (陳靜燕), the company's public relations official.

"The plan's implementation is underway, but no timetable has been finalized," she said.

Chi Mei currently operates three fabs in the park. The new investment plan appears to be another step by Chi Mei to boost the synergy of the park, Chen added.

The new plan aims to solicit module, packaging, or storehouse companies to open offices there, and if it succeeds Chi Mei will enjoy greater savings, according to Chen.

Equipment and material suppliers including Corning Inc of the US, the world's biggest LCD glass provider, announced earlier this month that it will build new plants in Tainan this year to meeting rising flat-panel demand.

Joining Chi Mei, HannStar Display Corp (瀚宇彩晶) decided to build a sixth-generation, or 6G, plant and a 7G plant in the Tainan park next month, a company executive said yesterday. The company currently manufactures 17-inch and 19-inch panels for computer monitors and flat-screen TVs at its 5G plant in the park.

HannStar plans to spend up to NT$90 billion on a 6G fab and a color filter plant, said Justin Chien (簡宏毅), an assistant manager of HannStar's finance division.

"The 6G plant will be primarily used to produce bigger 32-inch, or 37-inch panels for LCD-TVs," Chien said.

HannStar is slated to hold a groundbreaking ceremony for the 6G fab on March 1. The fab is shcheduled to start pilot production in the fourth quarter of next year.

The company does not have any fundraising plans this year, but is considering raising funds through share sales, bond issuance, and syndicated loans next year on capital expenditures, Chien said.

By contrast, TECO Group (東元集團), Taiwan's second-largest home appliance maker, has slowed down its onetime plan to build a plant in the area.

"We don't see an emerging need to boost our capacity now, as long as demand for LCD-TVs grows quite slow," said Frank Wu (吳宏庭), executive official of the group's Consumer Appliance and Service Sector.

TECO is able to produce about 600,000 LCD-TVs a year at its plants in Taiwan and China without using up its full capacities, Wu added.

High-tech companies in the science park are expected to double their production value this year to around NT$300 billion from NT$150 billion last year, according to the park's administration.

AU Optronics Corp (友達光電), Taiwan's biggest LCD panel maker, however, chose to build its sixth and seventh-generation plants in central Taiwan. The panels are highly cost-efficient in the manufacture of large-sized panels used to make LCD-TVs or computer monitors.