Getting closer to the customer is hitting a cord with Taiwan LCD suppliers. AUO, CPT and PVI are applying for approval to invest in China for LCD panel production. Now, PVI’s chairman, Scott Liu, said that production costs will be cheaper in China, but I disagree. The LCD manufacturing process requires very little in terms of human labor and is entirely done with advanced robots and machines. The last part of the process where the LCD becomes a module with all the connections attached and inserted into casing is very labor intensive. That’s why many LCD suppliers have built module factories in China to save on labor costs.
With China poised to become the largest economy in the world very soon, everyone is clamoring to have a manufacturing base there to tap into the hundreds of millions of potential customers that will be purchasing everything from mobile phones to large LCD TVs.