LG ramps up LCD production

Flat-screen maker LG Display Co Ltd said it would build a US$2.55 (NZ$4.03) billion production line, boosting its capacity to meet growing demand for liquid crystal display (LCD) televisions.

LG Display, the world's No.2 maker maker of LCD screens, said in a statement it would invest 3.27 trillion won, excluding building costs, to set up an additional line producing large, "eighth-generation" glass at its Paju complex in South Korea.

The decision signals that the LCD industry is returning to a full-fledged capacity expansion, rebounding from a sharp downturn last year, thanks to robust demand for flat-screen TVs in North America and China.

Makers are experiencing a shortage in panels as they slashed output in late 2008 during the worst of the slump, and are now scrambling to ramp up production and revive shelved investment plans.

The industry's No.3, AU Optronics Corp of Taiwan, in June said it was considering building a line that uses 8.5-generation technology for mass production as early as in 2011.

Japan's Sharp Corp plans to start production in October at its $3.9 billion new LCD plant, which would be the world's first to handle extremely large glass sizes dubbed 10th-generation substrates.

Industry leader Samsung Electronics Co Ltd, which produces LCD TV panels from a joint venture with Japan's Sony Corp, was previously reported to be considering using even larger 11th-generation glass.

LG Display's new line would begin mass production in the second half of 2010 with an initial capacity of 60,000 glass sheet input a month, the company said. The volume will increase to 120,000 sheets during 2011, depending on market conditions.

Its existing 8th generation facility began mass production in March this year.

DisplaySearch forecast the global LCD panel market to grow to 140 million units in 2009 and 161 million in 2010, compared with 113 million in 2008, according to data provided by LG Display.

LG Display shares ended up 1.77 percent at 34,500 won before the news, compared with the wider market's 2.55 percent gain. The stock has rallied 64 percent this year on hopes for sector recovery.

- Reuters