AU aims to get next-gen LCD plant online in H2 '09

TOKYO, Oct 25 (Reuters) Taiwan's AU Optronics Corp, the world's No. 3 LCD maker, said on Thursday it aims to get its planned next-generation LCD plant online in the second half of 2009, starting with production of 50- to 60-inch panels.

AU, which supplies panels to Dell Inc and Hewlett-Packard Co , plans to build a next-generation LCD plant to meet new demand for growing flat TVs, and will decide what technology it will use to make panels by the end of the year.

Its plant comes on the heels of similar expansion by bigger rivals like Samsung Electronics Co Ltd and LG.Electronics LCD.

''We are in for huge area growth (in LCDs), and we are doing our homework to learn how that capacity will be consumed,'' AU Chief Executive Officer H.B. Chen told Reuters in an interview.

''We have to think about cash flow, seasonality and timing. We do not have unlimited capex.'' The new plant is likely to lift capital spending in 2008 ''somewhat'' from the current forecast of 90 billion Taiwan dollars ( TOKYO, Oct 25 (Reuters) Taiwan's AU Optronics Corp, the world's No. 3 LCD maker, said on Thursday it aims to get its planned next-generation LCD plant online in the second half of 2009, starting with production of 50- to 60-inch panels.

AU, which supplies panels to Dell Inc and Hewlett-Packard Co , plans to build a next-generation LCD plant to meet new demand for growing flat TVs, and will decide what technology it will use to make panels by the end of the year.

Its plant comes on the heels of similar expansion by bigger rivals like Samsung Electronics Co Ltd and LG.Electronics LCD.

''We are in for huge area growth (in LCDs), and we are doing our homework to learn how that capacity will be consumed,'' AU Chief Executive Officer H.B. Chen told Reuters in an interview.

''We have to think about cash flow, seasonality and timing. We do not have unlimited capex.'' The new plant is likely to lift capital spending in 2008 ''somewhat'' from the current forecast of 90 billion Taiwan dollars ($2.8 billion), he said.

But the new plant will not harm AU's target to hit 15 percent return on equity consistently, he said.

Chen said AU aims to cut its overall cost structure by 10 percent to as much as 20 percent per unit by lowering material costs.

AU said earlier this week that it expected double-digit growth this quarter for sales of liquid crystal displays for flat TVs, but that the current quarter looks weak for the more mature desktop computer market.

REUTERS SR BD1237 .8 billion), he said.

But the new plant will not harm AU's target to hit 15 percent return on equity consistently, he said.

Chen said AU aims to cut its overall cost structure by 10 percent to as much as 20 percent per unit by lowering material costs.

AU said earlier this week that it expected double-digit growth this quarter for sales of liquid crystal displays for flat TVs, but that the current quarter looks weak for the more mature desktop computer market.

REUTERS SR BD1237