Government in talks to acquire land

The government is speeding up efforts to settle a land shortage problem in the face of the increasing needs of local flat-panel makers, who are building new factories as the highly cyclical industry starts to trend up, a government official said yesterday.

"To meet local manufacturers' needs, we are gearing up an attempt to get a piece of land adjacent to the science park," said Yang Wen-ke (楊文科), a deputy director of the Central Taiwan Science Park Administration in Taichung. "But we don't have much time as they are planning to construct new plants early next year."

Yang said the administration is in intensive talks with the Ministry of Defense to acquire a 120 hectare piece of land owned by the ministry, which accounts for a third of a total 380 hectares planned for new tenants after the original 413 hectares of land available were leased out.

Yang said the administration hopes to wrap up the talks by the end of this month.

AU Optronics Corp (友達光電), Taiwan's top supplier of liquid-crystal-display (LCD) panels, and smaller competitor Chunghwa Picture Tubes Ltd (中華映管), have already reserved the land for new plants, according to Yang.

AU Optronics plans to spend NT$400 billion to build four factories there in the future, according to Yang.

To meet the growing demand for LCD displays at a time when the industry is on an upswing, AU Optronics last month announced it would resume construction of a 7.5-generation factory worth NT$35 billion in another area of the park.

AU Optronics recently ramped up production of a sixth-generation (6G) plant there, enabling the company to produce 37-inch TV screens more cost-effectively.

In the latest report, market researcher iSuppli Corp said global supply of large-sized LCD panels would reach parity with the demand this year due to slow ramp up of new capacity.

That bode well for flat panel makers as quarters-long supply glut since the second quarter of 2004 has driven most players into losses.

In the near term, iSuppli predicted supply would tightened in the current quarter due to increasing demand for panels used for computer monitors and LCD TVs.

Chunghwa Picture Tubes Ltd (中華映管) also plans to invest NT$220 billion to build new plants there, company vice president Liu Chih-chun (劉治軍) said in a phone interview with the Taipei Times yesterday.

"We did express our concern about the land problem as we are scheduled to start constructing new fabs in the first half of 2006 at the latest, earlier than previously planned," Liu said.

"We have to act in response to the changing industry," he said.

Liu said that the company has several scenarios under consideration now, including building a fifth-generation plant mainly for computer monitors, as well as a 7.5-generation plant.