Bloomberg | March 8, 2011 | Adela Lin and Janet Ong
Taiwan will let Chimei Innolux Corp. (3481) and other domestic flat-panel makers take stakes or merge with Chinese peers as economic ties between the two sides deepen.
The panel makers can also start factories on the mainland based on the same generation of technology used in plants in Taiwan, Hwang Jung-chiou, a deputy minister at the Ministry of Economic Affairs, said in Taipei yesterday.
The new rules come after the island last week allowed Chinese investors to buy stakes in its liquid-crystal display and chip-manufacturing industries. The easing of investment norms will help Chimei and AU Optronics Corp. (2409) compete with South Korea’s Samsung Electronics Co. and LG Display Co. in China as the Taiwanese companies can be closer to their customers.
“This relaxation will allow Taiwanese panel makers to compete with global counterparts on an equal footing in China,” said Eric Kao, an analyst at KGI Securities Co. in Taipei.
Samsung Electronics and LG Display, the world’s two biggest makers of LCD panels, won approval from the Chinese government in December to build factories on the mainland. Samsung’s proposed 2.6 trillion won ($2.3 billion) plant in the Chinese city of Suzhou will be based on 7.5-generation LCD technology, while LG Display’s $4 billion factory will use eighth-generation technology. 8G plants are designed to make displays measuring more than 40 inches diagonally.
Chimei Innolux gained 0.5 percent to NT$33.85 as of 11:08 a.m. in Taipei trading, while AU Optronics added as much as 2.4 percent to NT$27.70, the stock’s highest intraday level since Feb. 17, and traded at NT$27.40. The benchmark Taiex index advanced 0.4 percent.
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