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The government's decision to allow local manufacturers greater access to Chinese facilities should help them compete with their South Korean rivals with South Korean rivals stretching their lead in unveiling substantial capacity expansion plans in China, Taiwanese liquid-crystal-display (LCD) panel makers are scrambling to follow suit to defend their Chinese turf and play catch-up before the imminent emergence of the world's most populous nation as the biggest market for flat-screen TVs.
In October, South Korean LCD panel maker Samsung Electronics Co signed a memorandum of understanding with the Suzhou Industrial Park Administration Committee to collaborate on building a cost-efficient 7.5-generation TV display factory in China for about US$35 billion. LG Display Co has also struck a deal to build a 8.5G plant to cut LCD glass panels in China.
Limited by Taiwanese government restrictions, local LCD panel makers have lagged behind their South Korean rivals in mapping out plans for China. Two weeks ago, however, the government lifted long-standing restrictions on local panel companies, allowing them to build production lines in China in a bid to reduce the risk of Taiwanese manufacturers losing even more of their market share to South Korean competitors. In the past, Taiwanese manufacturers had to export panels to Chinese clients.
"Under such circumstances, we have to be pragmatic [about limiting investment in China] and lend a hand to local enterprises," Minister of Economic Affairs Shih Yen-shiang told a media briefing earlier this month, unveiling the government's decision to ease bans on local LCD panel makers building factories in China.
Despite repeated calls from local companies, the government had previously been unwilling to relax restrictions on China-bound investments by flat-panel makers for fear of losing core technologies to China.
Taiwanese LCD-panel manufacturers are now allowed to build more cost-efficient 7.5G and 8.5G factories for cutting 40-inch or 52-inch TV panels from glass substrates, the Ministry of Economic Affairs said in a statement.
However, manufacturers are still required to keep more advanced technologies at home and to invest more locally, the ministry said.
Shih said the restrictions were being eased in anticipation of China becoming the world's biggest market for TVs and flat panels.
News Source: - http://www.taipeitimes.com