MOEA Issues Green Light to AUO’s FPD Plant Project in China

Taiwan`s leading FPD (flat panel display) maker, obtained the green light from the government last Friday (Dec. 17) to build a 7.5-generation FPD plant, at a cost of US$3 billion (NT$90 billion), in Kunshan, Jiangsu Province, enabling it to vie with south Korean rivals, Samsung and LG, for the huge Chinese market.

In exchange for the investment approval, AUO pledged to invest NT$400 billion in Taiwan in 10 years to build two 11th-generation FPD plants and two solar-cell plants in Central Taiwan Science Park, which will entail new employment of 5,000 staffers.

Hwang Jung-chiou, vice economics minister, explained that the Investment Commission, under the Ministry of Economic Affairs (MOEA), apprvoed AUO`s investment application, since the company meets the conditions of making corresponding investments in Taiwan and that its Taiwanese facilities lead the projected Chinese factory by at least one generation in technology.

AUO will invest in the Kunshan plant via a Malaysian subsidiary and is scheduled to kick off the facility in 2012. Of the US$3 billion investment fund, US$1.2 billion will be the new company`s paid-in capital, to be remitted by AUO in three years, with the remainder coming from bank loans.

The aforementioned NT$400 billion investment pledge in Taiwan will be added to the ongoing projects of building an 8.5-generation plant in Central Taiwan Science Park and a solar-cell components factory in Chungkang Export Processing Zone, Taichung City, which will cost NT$150 billion in combination.

The projected AUO FPD plant will compete with four other high-level FPD factories in China, built by Samsung, LG, and China`s BOE and TCL.

(by Philip Liu)

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