Taiwan panel maker to build LCD plant in China

China has approved a plan by Taiwanese flat screen manufacturer AU Optronics Corp. to build a liquid crystal display (LCD) panel plant in the country, industry sources said Wednesday, a move likely to intensify competition between Korean and Taiwanese panel makers. 

The sources said AUO will invest some $3.25 billion in its Chinese partner Kunshan Longfei Optical Electronics for setting up an 8.5-generation panel production line in the city of Kunshan, China. AUO plans to start operation of the plant in 2013. 

The approval will help the Taiwanese LCD maker tap growing demand for large-size flat panels used for televisions and computers. Korean LCD makers Samsung Electronics Co. and LG Display Co. in December obtained approval from the Chinese government to build LCD factories there.