China: Hotbed for LCD Construction

BOE @ 8 According to The Wall Street Journal, BOE Technology Group, a Chinese display supplier, announced on August 27, 2009 that the company would lead a consortium to investing about US$4.1 billion to construct an 8th generation LCD fabrication plant in Beijing. The construction will take a little over two years to build.

A Major LCD TV Market China is becoming the go-to location for LCD plants. Not because the cheap labor: LCD panel manufacture requires very little human intervention. The main reason why major LCD manufacturers are going straight into the heart of China is because of demand: China’s demand for LCD TV is expected to hit 20 million units in 2009. That’s a considerable jump from 15.7 million units in 2008. By 2011 there will be three major LCD TV markets: North America, Western Europe and China. These three markets will account for about 90% of the worldwide LCD TV market. LCD TV penetration in China will hit 50% in 2009 and that number will grow to almost 70% in 2010. Of course China is also making it very tempting to do business there with low-cost land. Another benefit from locating LCD production in China is the increased efficiency in procuring parts, driver ICs for example, since the country is an electronics supply chain global center.

Top Players LG Display announced earlier in the week its intentions of constructing a LCD plant, also 8th generation, in Guangzhou for a total investment of more than US$3 billion. LG Display shipped 2.5 million LCD panels into China in 2008. With a LCD fab located within China the total number of LCD panels that will serve the China market will undoubtedly increase significantly. Samsung has also expressed interest in building a LCD plant in China.

Source: WSJ

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