LG Display Plans to Build LCD Factory in China

LG Display Co. plans to build the biggest and most advanced liquid-crystal display factory in China as the South Korean company seeks to meet surging demand for flat-screen televisions in the country.

The world’s second-biggest LCD maker signed a preliminary agreement on Aug. 21 with the city of Guangzhou, China, LG Display said in a regulatory filing today. The deal is subject to approval by the South Korean government and Seoul-based LG Display’s board, it said, without providing financial details.

The factory, estimated by Maeil Business Newspaper to cost as much as 5 trillion won ($4 billion), would be three generations ahead of China’s most advanced LCD plant. The investment faces the challenge of winning South Korea’s approval because the government has the option of blocking the transfer of technologies deemed as strategic.

“If the plan is realized, it will be an important landmark for the industry in China and may prompt other LCD makers to follow suit,” said Shi Hong, an electronics analyst at Industrial Securities in Shanghai. “For LG, there are commercial advantages in setting up LCD production facilities in China as many of its customers are based there.”

LG Display, based in Seoul, rose 2.6 percent to close at 36,250 won as Korea’s benchmark Kospi stock index dropped 0.7 percent. The stock has gained 73 percent this year, leading a rally by shares of the four largest LCD producers, as demand in China helped drive up panel prices.

Samsung Interested

Samsung Electronics Co., the world’s largest LCD maker, has some interest in building a factory in China, Chang Won Kie, president of the Suwon, South Korea-based company’s LCD business said today. Sharp Corp., Japan’s largest maker of LCD TVs, said in June it’s in talks with a partner in China to start producing LCDs in the country. link.....