AUO, CMO urge Taiwan to lift ban, as Korea lets Samsung, LGD set up LCD plants in China

AU Optronics (AUO) chairman KY Lee has indicated that the company has completed preparations for building LCD plants in China and is only waiting for the Taiwan government to lift its ban on cross-strait investment, while Chi Mei Optoelectronics (CMO) has urged the government to relax its policy before it is too late.

The Korea government on Thursday approved the applications by Samsung Electronics and LG Display (LGD) to set up LCD plants in China, facilitating their competition with the Taiwan rivals in one of the world's the fast growing LCD TV markets.

AUO currently runs LCD module (LCM) plants in Suzhou, Xiamen and Sichuan, China, and is reportedly planning to set up a 7.5G LCD plant in Suzhou for 42- and 47-inch panel production.

CMO has urged the Taiwan government to lift the cross-strait investment ban on LCD makers as soon as possible, allowing them to build fabs in China comparable to their Korea competitors' in terms of panel generations.

Taiwan's economic minister Shih Yen-Shiang early indicated that government might lift the cross-strait investment ban as early as the first quarter of 2010, but later said there was no timetable.

Samsung will now be allowed to set up a 7.5G plant in Suzhou, China, which will process 60,000 glass substrates monthly beginning in 2012. Total investment is expected to reach US$2.25 billion.

LGD will cooperate with the Guangzhou government in southern China to set up a 8G plant, and production will begin in the first half of 2010 with a monthly capacity of 120,000 glass substrates. The plant will mainly produce 40-inch and larger LCD panels. LGD is expected to invest about US$4 billion in the project.