Tue, Nov 28, 2006 - Page 11 News List

Fuji Photo, SVA Electron to invest in LCD venture

'BOUNTIFUL RETURNS' With demand for traditional camera film sagging, Fuji is teaming up with a Chinese partner to manufacture color filters for LCD TV sets

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Fuji Photo Film Co, the world's biggest maker of film used in flat panels, and SVA Electron Co (廣電電子) plan to invest US$270 million in a venture to make color filters for liquid-crystal-display (LCD) TVs to tap rising demand.

Fuji Photo will own 25 percent of SVA-Fujifilm Opto- Electronic Materials Co, scheduled to start production in November next year, the Tokyo-based company said yesterday.

Shanghai-based SVA will hold a 75 percent stake in SVA-Fujifilm, which will make color filters used in laptops, monitors and large-screen TVs for the Chinese market, Fuji Photo said.

The venture marks the first time Fuji Photo will be making color filters for LCDs and comes as the company tries to raise sales of electronic parts to offset falling demand for traditional camera film. Shanghai-based SVA-Fujifilm will allow SVA to obtain color filters at a lower price than those the company currently imports from Japan, South Korea and Taiwan.

"Our partnership is sure to have bountiful returns," Gu Zhonghui (顧忠惠), chairman and president of SVA Electron, said at a press conference. The venture will gain technical expertise and cost control through a research unit to be set up by Fuji Photo, Gu said.

SVA-Fujifilm has an output capacity of 70,000 filters a month and will employ about 500 workers when it starts "mass scale" production, Fuji Photo said in a statement.

The venture, with a paid-in capital of US$100 million, will make color filters using Fuji Photo's technologies, the statement said.

Gu said the filters will be sold to Shanghai SVA NEC Liquid Crystal Display Co, a venture of SVA Group and Japan's NEC Corp that makes LCDs. Color filters account for one-quarter of the cost of producing an LCD panel, he said.

Fuji Photo plans to invest ?4 billion (US$34 million) to set up a research and development unit in Shanghai to develop new products and LCD-related technologies, focusing on color filters.

"Fuji Film has positioned production of materials for LCDs and other flat-panel displays as a core business and will sustain its investment in R&D and enhanced production capacity," the company said.

The company targets US$26.9 billion in sales in the year ending March 31, 2010, from US$22.8 billion in the last fiscal year, said Noboru Sasaki, a Fuji Photo vice president, reiterating a forecast given in April.

Sales at its flat-panel material business, which includes color filters and film used in the displays, are projected to more than double by 2010 to US$2.7 billion, from US$1.2 billion in the year ending March 31, Sasaki said.

Domestic sales and exports of Chinese-made LCD TVs rose sixfold last year to 4.2 million units, from 700,000 a year earlier, the Beijing-based research company CCID Consulting Ltd (賽迪顧問) said.

BOE Technology Group Co (京東方科技集團), China's biggest maker of flat-panel displays, said in April it will spend 2.5 billion yuan to build a production line to make color filters in Beijing.

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