SVA Group said yesterday it will invest heavily to establish a sixth-generation LCD panel plant in Shanghai's southwest Xinzhuang, a newly approved state-level LCD industry park.

 

Sixth-generation production adopts the most advanced technology in domestic liquid crystal display industry, which enables makers to provide LCD TVs of 32 inches to 40 inches.

 

"We have decided to establish the new line in Xinzhuang and the tech standard is the sixth-generation," Chen Dong, the company's spokesman, said in a phone interview yesterday.

 

SVA Group has established a joint venture with NEC to operate a fifth LCD panel line, which mainly produces panels for LCD monitors or laptops.

 

"The profit margin is limited on monitor panels because of price pressure in the 17-inch and 15-inch market," said Zhang Bing, an analyst at Display Search, a US-based IT consulting firm.

 

"To ease the dependence (on large LCD panels) on foreign giants, China should have advanced production lines," said Zhang.

 

Samsung, LG Philips and Sharp use the latest technology to construct eighth-generation or higher production lines.

 

Economically speaking, it's wise for SVA to produce LCD panels of 32 to 40 inches, because it meets most requirements in future, according to Analysys International, a Beijing-based IT consulting firm.

 

A sixth-generation LCD panel line costs about 2 billion U.S. dollars, experts said.

 

SVA plans to launch an initial public offering overseas after a possible merger with two domestic players, SVA President Gu Peizhu said during a previous interview.

 

China's top three LCD panel makers SVA, Beijing-based BOE Technology Group and Jiangsu Province-based IVO will set up a joint venture, which will be announced by the end of June if successful, according to the companies.

 

"We need the capital to expand but we can't issue an IPO in the domestic market due to a strict requirement (by the stock regulator) on profit. Therefore, overseas markets are our choice," said Gu.

 

Xinzhuang Industrial Park, founded in 1995, plans to introduce 2.5 billion dollars in foreign investment and reach 10 billion dollars in annual sales in future.

 

With a total investment of 6 billion dollars, the park will have material and component providers, including color filters, to establish a complete LCD industry chain.

 

(Shanghai Daily June 19, 2007)