Fri, Nov 23, 2007 - Page 12 News List

EPA gives green light to Chi Mei Optoelectronics

COLOR OF MONEY Chi Mei's sixth-generation plant in Tainan got the go ahead, but the flat-panel maker also plans a eighth-generation plant

AP AND BLOOMBERG , TAIPEI

Taiwan's environmental protection agency has cleared flat panel maker Chi Mei Optoelectronics Corp (奇美電子) to resume building a new factory in Tainan, a company executive said yesterday.

The sixth-generation plant will start mass production in the second quarter of next year after the clearance from the Environmental Protection Administration, finance director Dennis Chen (陳世賢) said.

The environmental agency asked the government in June to halt construction of the factory in Tainan because of concerns over pollution.

Chi Mei, the world's fourth-largest flat-panel maker by revenue, is targeting monthly capacity of 30,000 flat panels at the plant once it starts operation, Chen said. That will rise to 60,000 flat panels a month by the end of next year and the plant will eventually be able to produce 90,000 flat panels a month, he said.

NEXT GENERATION

The company also has plans to build an eighth-generation plant, but hasn't decided when to start construction. Earliest operation would be in the middle of 2009, because it takes a year-and-a-half to build a factory, Chen said.

Shares of Chi Mei gained NT$1.30, or 2.96 percent, to NT$45.30. Sales at Chi Mei Group will climb 40 percent to NT$700 billion (US$21.6 billion) next year, Loreta Chen (陳靜燕), a Chi Mei public relations official, said by telephone yesterday, confirming a report in the Chinese-language Economic Daily News. Growth will be driven by a 25 percent to 30 percent increase in flat-panel shipments, she said.

"The demand for LCDs will continue to exceed supplies in the near term," said Andrew Wang, who helps manage US$1.3 billion at Prudential Financial Securities Investment Trust Enterprise (保德信元富投信). "That's good news for panel prices and panel makers' profit."

RIVALS

Elsewhere, AU Optronics Corp (友達光電) gained 1 percent to NT$63.60.

Smaller rivals Chunghwa Picture Tubes Co (中華映管) added 3.3 percent to NT$12.40, and Hannstar Display Corp (瀚宇彩晶) rose 3.5 percent to NT$15.

Innolux Display Corp (群創光電), the world's second-largest maker of flat-screen computer monitors, gained 3 percent to NT$118.50.

Prime View International Co (元太科技) jumped 4.6 percent to NT$49.45 on the GRETAI Securities Market after the LCD maker said on Wednesday it led a group to buy Korea's BOE Hydis Technology Co and will increase its LCD manufacturing capacity fivefold through the purchase.

"Prime View's purchase signals that panel makers want capacity and that suggests demand is out there," said Robyn Hsu (許家豪), who helps manage US$152 million funds at Truswell Securities Investment Trust Co (富鼎投信). "A shortage in screens will help prices and profits."

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