By Craig Zammit
SEOUL: Flat screen manufacturer LG.Philips LCD has announced it has entered into a preliminary agreement to build a new LCD module manufacturing plant in Guangzhou, China.
With expansions to the existing module plant in Nanjing, China currently underway, and a new plant in Wroclaw, Poland breaking ground in June, the Guangzhou plant will become the firm’s third overseas module production plant.
“In May 2006 we entered into an agreement with the Guangzhou Development District Administrative Committee to construct a module production plant in Guangzhou,” said the company in a disclosure statement filed to the New York Stock Exchange.
While the firm has not confirmed the investment size or timing of the new plant, it is hoped that the increase in production of LCD modules will help LG.Philips LCD recover from the recent drop in forecast earnings following a lower than expected FIFA World Cup sales boom.
Philips has also announced that they plan to float or sell the majority of its semiconductor business, which market analysts believe to be worth $9 billion to $10 billion, to financial investors before 2007.
Philips exiting the category will now allow Toshiba to grasp more of the market after the February 2006 expansion of its semiconductor business.