Samsung Electronics breaks ground on LCD plant in China

By Kim Young-gyo HONG KONG, May 30 (Yonhap) -- South Korean tech behemoth Samsung Electronics Co. started work Monday on its new liquid crystal display (LCD) plant in China, company officials said. Samsung Electronics signed an agreement last month with Chinese TV maker TCL Corp. to set up a joint venture, Samsung Suzhou LCD (SSL), to operate the plant in Suzhou, a city on China's east coast. Samsung Electronics holds a 60 percent stake in SSL capitalized at US$3 billion, while the Chinese TV manufacturer will have a 10 percent stake. The remainder of the stake will be held by the operator of the Suzhou Industrial Park. Samsung said it plans to start operations of the upcoming 7.5-generation LCD factory in early 2013, adding that they expect the new plant to produce 100,000 units a month. The plant, together with the existing LCD module factory that has been operating in Suzhou since late 2003, will allow the South Korean maker to carry out the entire LCD production process within China, providing timely and cost-effective services to Chinese clients, the officials said. The move comes after the world's largest flat display maker obtained approval from the Chinese government in December last year to build an LCD factory in the country. The approval was expected to help the world's largest LCD maker tap further into China's growing demand for large-size flat panels used for televisions. In 2010, China became the largest LCD TV market in the world, with total sales estimated to have hit 40 million units, surpassing those in the United States, driven by the country's economic growth. Meanwhile, Samsung's smaller rival LG Display Co. has also gotten the nod from the Chinese government to build an eight-generation factory in Guangzhou in southeastern China. LCD makers in Taiwan and Japan, including AU Optronics Corp. and Sharp Corp., have also sought to win approval to build LCD factories in the world's most populous country.