AU Optronics Corp (友達光電), the nation’s biggest LCD panel maker, said yesterday it had submitted a proposal to the government to invest US$3 billion in a new plant in China.
The Hsinchu-based company said it planned to build a 7.5-generation plant in Kunshan, Jinagsu Province, which would help AU Optronics strengthen its competitiveness in China, one of the world’s fastest-growing TV markets.
GOING IT ALONE
Instead of forming a joint venture with the local government — such as a deal bigger rival Samsung Electronics Co is planning — AU Optronics “plans to build the plant on its own,” company spokesperson Hsiao Ya-wen (蕭雅文) said by telephone.
AU Optronics is the first local LCD panel maker to file a China investment plan following the government’s relaxation of China-bound investment rules on panel makers and other sectors, including the semiconductor industry, last month.
GEAR UP
AU Optronics “certainly needs to gear up to capture business opportunities,” as its rival Innolux Display Corp (群創光電), along with parent company Hon Hai Precision Industrial Co Ltd (鴻海精密), have built a strong manufacturing base in China, said Tony Tseng (曾省吾), head of Taiwan Research at Bank of America Merrill Lynch.
AU Optronics plans to spend US$1.2 billion setting up the subsidiary in Kunshan and would seek financial support from Chinese banks to build the 7.5G factory, it said.
The LCD panel maker aims to expand its Chinese market share to 30 percent this year from 26 percent last year.
GROWTH
It expects the LCD TV market in China to grow by 40 percent year-on-year to more than 35 million units this year, accounting for 22 percent of the world market.
The company also promised that it would continue to invest in new generation lines in Taiwan. The company is scheduled to move in equipment for its second 8.5-generation production line by the end of this year.
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