TPO Sells LCD Plant to China, Says Paper

Date: 7 June 2007

Taiwan-based TPO Displays has sold its 2.5-generation (2.5G) TFT LCD plant at Kobe, Japan to China-based Shenzhen Laibao High-technology (SLC), according to Ray Chen, chairman of TPO, as quoted by the Chinese-language Commercial Times, which also quoted sources in saying the value of the deal amounts to more than NT$1.2 billion (US$36.25 million).

Chen was cited in saying since the costs at the line are too high, it is more appropriate to transfer related facilities to China, adding that the production base at Kobe will only focus on R&D activities in the future, with non-related staff to be laid off.

TPO was unavailable to confirm the news prior to publication.

SLC specializes in the production of high-end ITO (indium tin oxide), a key component for TFT LCD and color filter (CF) production, transparent conductive glass and CF.

In November 2006, Chen said TPO will continue adjusting production at the 2.5G line in Kobe, Japan and will not rule out any moves, including a merger or sellout for the line.

TPO merged with Royal Philips Electronics' Mobile Display Systems (MDS) in June 2006. Through the merger, TPO gained the 2.5G LCD plant in Kobe, Japan, which has a monthly capacity of 25,000 units.

With the sale of the plant, TPO is likely to move forward the time of turning profitable to the third quarter of this year, the paper noted.

In May, Chen said TPO is expected to turn profitable in the fourth quarter of 2007 amid stabilizing prices for small-size panels, rising shipments and better cost control.

In 2006, Compal, the parent company of TPO, recognized losses of nearly NT$4 billion from TPO and Vibo Telecom, another subsidiary of Compal, Chen added.