After a long wait of nine months from the date Taiwanese flat screen manufacturer AUO submitted its application in March to Taiwan's government for approval to build a new plant in China, AUO announced on December 17 that Taiwan's MOEA (Ministry of Economic Affairs) finally relaxed restrictions on the plan, according to a press release by AUO. Under the plan, the company will build its first 7.5G LCD (Liquid Crystal Display) panel plant in China, in order to help the company reduce transport costs and better serve its Chinese clients in a bid to compete head-to-head with its Korean rivals. The new plant, to be built in Kunshan, Jiangsu Province, will be capitalized at US$3 billion and begin mass production in 2012, the chinatime.com reported on December 17. In return, the company promises to invest a total of NT$550 billion (US$18.4 billion; US$1 = NT$29.9) in Taiwan in the future. Currently, AUO operates an 8.5G plant in Taichung, central Taiwan and is projected to build two new plants in Taiwan to generate 11G panels. Further details regarding production volume, however, were yet to be disclosed.
Aside from AUO, Korean LCD makers Samsung and LG Display were also separately received approvals from the Chinese government in early December. Samsung will build a 7.5G plant in Suzhou for US$2.3 billion while LG will establish an 8G plant in Guangzhou for US$4 billion, the Bloomberg reported. Meanwhile, Japanese Sharp is also in discussion with China on building an 8G plant as well. At present, most LCD plants in China are 5G or 6G plants. The establishment of these new LCD plants will tap the burgeoning demand for 40-inch LCD TVs or above in the country.