AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday said it planned to invest US$796 million in Chinese panel maker Longfei Optoelectronics Co (龍飛光電) to jointly build a next-generation plant to produce TV panels.
The move came after the government last month relaxed restrictions on local companies investing in Chinese panel makers and scrapped a ban on building factories in China with the most advanced technology.
The investment would “help AUO expedite its capacity deployment in China, while reducing its investment risk,” company spokesperson Hsiao Ya-wen (蕭雅文) said by telephone.
Both Samsung Electronics Co and LG Display Co have obtained the go-ahead from the Chinese government to respectively build a seventh--generation and an eighth-generation TV factory there.
Investing in Longfei Optoelectronics would help AUO catch up with its South Korean rivals, as Longfei Optoelectronics has already obtained Beijing’s approval to build a next-generation TV panel plant in Kunshan.
“The investment in Longfei will have a positive impact on AUO as the Chinese TV market is still one of the fastest-growing markets,” said David Hsieh (謝勤益), a vice president of market researcher DisplaySearch.
Shipments of LCD TVs in China are expected to enjoy a compound average growth rate of 10 percent over the next few years to 2014.
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