With the aim of meeting the soaring demand for flat-screen televisions in China, the South Korean LG Display Co. intends constructing an extremely sophisticated $3 billion liquid-crystal display (LCD) factory in the Chinese city of Guangzhou.
Though LG Display, the world's second-ranking LCD maker, refused to divulge the financial details of the agreement, it said in a regulatory filing that it had signed the a nonbinding memorandum of understanding with the Guangzhou government on August 21.
However, the deal is subject to approval by the board of the Seoul-based LG Display as well as the South Korean government.
According to LG Display, the proposed plant will use highly-developed 8th generation technology, which will be capable of manufacturing LCD panels measuring 50- inches diagonally. At present, the LCD maker only has a panel assembling plant in China.
Commenting on the proposed agreement for the planned facility in China, Shi Hong, an electronics analyst at Shanghai's Industrial Securities, said: "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. For LG, there are commercial advantages in setting up LCD production facilities in China as many of its customers are based there."
Going by the Austin, Texas-based DisplaySearch, the sale of LCD TVs in China this year will increase a whopping 76 percent to 23.6 million!