Chi Mei Develops TFT-LCD Material Manufacturing in Mainland China

Taipei, Oct. 7, 2005 (CENS)--Taiwan's Chi Mei Group recently announced plans to invest US$70 million in expanding the capacity of an acrylonitrile butadiene styrene (ABS) resin plant. The company will also set up a new polymethyl methacrylate (PMMA) resin facility at its manufacturing campus in Zhenjiang, Jiangxi Province, mainland China.

The PMMA resin is the key material for making liquid crystal display (LCD) light-guide panels. Chi Mei's move shows that the group's TFT (thin film transistor)-LCD business deployment in mainland China has extended from making key parts for TFT-LCDs to LCD module (LCM) production.

Chi Mei currently runs a large-sized TFT-LCD panel manufacturing unit in Taiwan, the Chi Mei Optoelectronics Corp. (CMO), the No. 2 maker of its kind on the island. The group has been actively developing its panel and finished product (LCD TV and PC monitors) business on the both sides of the Taiwan Strait.

Industry sources said that mainland China's central government has been actively pushing for the development of the country's native TFT-LCD panel industry in recent years. Several Chinese-owned companies have jumped into setting up fifth-generation (5G) panel plants in China, including BOE Hydis Technology Co., Ltd. And Shanghai SVA NEC Liquid Crystal Display Co., Ltd. (SVA-NEC), among others. To supply the resulting panel-parts demand, China's central government has been soliciting major global materials and parts suppliers in the line to invest in China.

Corning Inc. of the U.S., for example, has announced plans to set up glass furnaces in China, while Taiwan's SinTek Photronic Corp., a leading color filter producer, is also evaluating the feasibility of setting up a plant on the other side of the Taiwan Strait.

CMO has applied to the Taiwan government for a mainland China investment project, which includes setting up two LCM plants in China in two years. Industry sources said that CMO's moves have shown parent company Chi Mei Group's strong ambition to deploy in the mainland.

A senior official at Chi Mei's Zhenjiang ABS plant pointed out that the facility's current annual capacity is 150,000 tons of ABS resin and 300,000 tons of polystyrene (PS). After the scheduled expansion, the Zhenjiang plant's ABS annual capacity will be about 250,000 tons, while a new PMMA plant with an annual capacity of 50,000 tons is expected to be completed by the end of 2006.

A key material in producing building materials, auto lamps, and decorations, PMMA is also the most important material in light-guide panel production. Currently, Chi Mei's PMMA plant in Taiwan owns an annual capacity of 100,000 tons, and the volume is expected to be expanded to 130,000 tons in the near future.

Chi Mei Group's Mainland China Deployment
	Zhenjiang Facility (Petrochemical)	Westinghouse Digital Electronics (WDE)*
Product	--ABS, annual capacity of 250,000 tons --PS, 300,000 tons	LCM
Recent Investment	US$10 million	US$30 million
New Plans	--Additional annual ABS capacity of 300,000 tons --A new PMMA plant with annual capacity of 50,000 tons	--To get controlling stake in WDE --Expand monthly LCM capacity to 2.8 million units in two years
Goal	To directly supply light-guide panel material in mainland China	To cut TFT-LCD panel production cost
*: Westinghouse Digital Electronics (WDE) is a LCM production venture between Westinghouse of the U.S. and Coretronic Corp. of Taiwan Source: The companies