UPDATE:AUO: Received Local China Government Invites For LCD Plant
03 Setembro 2009 - 6:16AM
Dow Jones News
AU Optronics Corp. (AUO) has received invitations from local
governments in China to set up a panel manufacturing facility in
the mainland as Taiwan's biggest maker of liquid crystal displays
weighs options to meet growing demand from the region, an executive
said Thursday.
Paul Peng, executive vice president of AU Optronics, said,
however, the company would make the LCD plant investment only after
the Taiwan government relaxes restrictions for doing so.
Taiwan currently only allows panel makers to invest in
flat-panel television or module assembly plants in China and
forbids more technologically sensitive flat-panel manufacturing
facilities investments overseas.
The Chinese cities that have lobbied for AU Optronics'
investment include Guangzhou and Shenzhen in Guangdong province;
Fuzhou in Fujian province; as well as Shanghai, Kunshan, Chongqing,
Nanjing and Hefei, he said.
However, AU Optronics hasn't made a decision on the location or
the technology it plans to use in China.
"We also need to think about what the opportune time is to open
panel plants in China," Peng said on the sidelines of a conference.
"Is it good timing now with so many companies all entering at the
same time?" Peng said.
His comments came after South Korea's LG Display Co. (LPL), the
world's biggest LCD panel supplier by sales, said last week it
plans to build a panel manufacturing plant in southern China using
advanced eighth-generation technology. The announcement was
followed by Samsung Electronics Co., which also said it's
interested in building a flat-panel manufacturing plant in
China.
Also last week, Chinese flat-panel maker BOE Technology Group
Co. (000725.SZ) said it will build an eighth generation
manufacturing facility in Beijing with total investment of CNY28.03
billion ($4.1 billion.)
Peng said the company began increasing shipments to China since
late last year in anticipation of weakening demand from Korean and
Japanese vendors that have been its largest buyers. He also expects
rising demand from China will be able to offset potentially reduced
orders from an unprecedented agreement between Samsung Electronics
Co. (005930.SE) and LG Electronics Inc. (066570.SE) to purchase LCD
panels from each other from the end of this month.
AU Optronics' LCD TV panels purchased by Chinese branded TV
makers is expected to account for 20% of the company's overall TV
panel shipments this year, up from around 8% last year, Peng
said.
That percentage is set to rise even more next year to over 25%,
he said.
According to market research firm DisplaySearch, China will
become the world's largest LCD TV market in the world, surpassing
North America and Western Europe by 2012, when 39.4 million units
of LCD TVs are expected to be sold in the mainland, compared with
13.4 million units in 2008.
The company is growing its business in China thanks in part to
warming cross-strait relations after China-friendly Ma Ying-jeou
was elected president of Taiwan in early 2008. Chinese TV makers,
led by the China Video Industry Association, said in June they
would increase their commitment to buy flat panels from Taiwan
worth $4.4 billion from around $2 billion planned originally.
Peng said Taiwanese panel makers' shipments to China so far have
not been able to fully meet the demand from Chinese vendors and may
not be able to fulfill the entire $4.4 billion worth of orders
mainly because of an industrywide glass shortage that was
exacerbated by earthquake damages in Corning Inc.'s (GLW) Japan
facility.
The executive said he expects glass shortages to result in a
decline of 5% to 10% in its utilization.
-By Joy C. Shaw, Dow Jones Newswires; (86-21) 6120-1200;
joy.shaw@dowjones.com