Skyworth Digital Holdings, LG Display Co and Guangzhou-Kaide Technologies Development Co agreed to invest USD4 billion to build a venture in China to make TFT-LCD materials.
Their decision came as domestic TV and panel makers are beefing up efforts to tap the booming LCD TV market on the Chinese mainland, where LCD TV sales surged 80.5 percent in 2009 from a year ago to 86.75 billion yuan (USD12.7 billion). The joint venture will have a registered capital of USD1.33 billion, and LG Display will own 70 percent, Guangzhou-Kaide 20 percent and Skyworth 10 percent, according to a statement Skyworth filed to Hong Kong stock exchange yesterday.
"The stable supply of LCD panels is one of the major factors affecting the company's ability to maintain the success of its TV business," said Frederick Leung, executive director of Skyworth Digital Holdings.
"In view of the recent and expected drastic increase in LCD TV demand in the Chinese market, the company could gain from the benefits in the LCD product market in China and expand its presence in the market," Leung added.
While some analysts agreed that the venture could secure a stable supply of LCD panels, others are not so optimistic.
"The key techniques and patents are still in the hands of foreign counterparts," said Luo Qingqi, senior director of Pully Consulting. "It does not change the fact that domestic companies are at a disadvantage in panel supplies."
The new company, LG Display (China) and based in Guangzhou, will make, sell and trade TFT-LCD materials as well as electronic parts. The plant is expected to start mass production of LCD panels bigger than 40 inches from the first half of 2012, with total capacity of 120,000 units, according to LG Display.
The venture is pending approval from Chinese authorities.
Their decision came as domestic TV and panel makers are beefing up efforts to tap the booming LCD TV market on the Chinese mainland, where LCD TV sales surged 80.5 percent in 2009 from a year ago to 86.75 billion yuan (USD12.7 billion). The joint venture will have a registered capital of USD1.33 billion, and LG Display will own 70 percent, Guangzhou-Kaide 20 percent and Skyworth 10 percent, according to a statement Skyworth filed to Hong Kong stock exchange yesterday.
"The stable supply of LCD panels is one of the major factors affecting the company's ability to maintain the success of its TV business," said Frederick Leung, executive director of Skyworth Digital Holdings.
"In view of the recent and expected drastic increase in LCD TV demand in the Chinese market, the company could gain from the benefits in the LCD product market in China and expand its presence in the market," Leung added.
While some analysts agreed that the venture could secure a stable supply of LCD panels, others are not so optimistic.
"The key techniques and patents are still in the hands of foreign counterparts," said Luo Qingqi, senior director of Pully Consulting. "It does not change the fact that domestic companies are at a disadvantage in panel supplies."
The new company, LG Display (China) and based in Guangzhou, will make, sell and trade TFT-LCD materials as well as electronic parts. The plant is expected to start mass production of LCD panels bigger than 40 inches from the first half of 2012, with total capacity of 120,000 units, according to LG Display.
The venture is pending approval from Chinese authorities.
