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Chi Mei to double China plant capacity in two years

hi Mei Optoelectronics Corp (奇美電子), the nation's No. 2 producer of liquid-crystal displays, said it will more than double capacity at its China facilities by the end of 2008 to tap the nation's growing television-making industry.

The company will begin assembling LCD TVs at its new facility in Foshan by the end of next year, with capacity at the factory to reach 2 million units a month by the end of 2008, Loreta Chen (陳靜燕), a spokeswoman for Chi Mei Optoelectronics, said yesterday in a telephone interview.

Chi Mei, based in Tainan, began production of partly assembled TVs, or modules, at a separate facility in Ningbo in April, Chen said. The Ningbo plant will have capacity of 1.35 million a month by the end of next year, she said.

Chi Mei and rivals such as AU Optronics Corp (友達光電) are expanding their screen-assembly production facilities in China to take advantage of lower wages and proximity to China's growing TV-manufacturing industry. The LCD makers are also trying to attract suppliers to the area.

"There should be some suppliers with us," Chen said. "An effective cluster would be very helpful to the industry."

Domestic sales and exports of Chinese-made LCD TVs rose six-fold last year to 4.2 million units from 700,000 a year earlier, according to Beijing-based research company CCID Consulting Co.

The government has approved a total of US$90 million in investments this year for Chi Mei to expand its presence in China. Chi Mei's board on March 31 approved US$30 million in spending on a new facility in China and US$60 million for the existing plant in Ningbo.

Hsinchu-based AU Optronics said on July 5 that it is seeking a US$420 million loan to expand its screen assembly plants in Suzhou and Xiamen.

Chen would not comment on reports that Chi Mei would invest a total of US$2 billion in the Foshan facility.

Shares of Chi Mei Optoelectronics were up NT$0.95 at NT$38.50, while AU Optronics lost NT$0.70 at NT$47.80.
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