Taiwan approves AU Optronics to build LCD plant in China

Dec 17, 2010, 10:01 GMT

Taipei - Taiwan's Investment Commission Friday approved flat-screen maker AU Optronics Corp's 3-billion-US-dollar plan to build its first liquid-crystal display plant in China.

The approval of the widely watched project has indicated the government's determination to loosen its grip on high-tech investments by local firms in China in the face of tough competition from South Korea, market analysts said.

In a review meeting, commission members gave the go-ahead to AU Optronics after more than an hour of review and discussion.

'AU Optronics has prepared all the necessary documents and completed all required procedures in submitting its proposed investment project for our review,' a spokesman of the commission said of the approval of the project.

AUO, Taiwan's second-largest maker of LCDs, applied in April for the building of the 3-billion-US-dollar LCD plant, using 7.5 generation technology to make panels in Kunshan in eastern China.

The spokesman said the project was approved also on the grounds that AUO had agreed to keep more advanced technologies at home, which was a basic criterion for the government to approve any investment projects by local high-tech firms.

The approval was already a year behind South Korea's permission for Samsung and LG, the world's two-largest LCD makers, to build LCD plants in China.

Taiwan has been strict in allowing local high-tech firms to invest on the mainland, based on the consideration that China would absorb Taiwan's technologies and create stiff competition against the island in the future.

The once bitter political rivalry between Taiwan and China was also a factor restraining the local investments in China. Taipei and Beijing used to be rivals after they split at the end of a civil war in 1949.

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