Taipei, Dec. 4, 2007 (CENS)--Chi Mei Optoelectronics Corp. (CMO), the No. 2 manufacturer of thin film transistor-liquid crystal display (TFT-LCD) panels, plans to set up a LCD module (LCM) production plant in northern Vietnam in 2008 and form a panel-industry cluster in the region, according to company president Ho Chao-yang.

CMO plans to pour billions of New Taiwan dollars into the project, making it the first LCM maker in Vietnam.

Ho pointed out that more and more big downstream customers have set up production bases in northern Vietnam, including Compal Electronics Inc., Acer Inc., Hon Hai Precision Ind., and they required CMO to directly and locally supply LCMs. After the Vietnam LCM plant achieves economy of scale, CMO plans to persuade peripheral suppliers to jointly create a panel industry cluster there.

Hon Hai plans to pour US$5 billion to set up production plants in Vietnam to locally produce personal computers (PCs), digital cameras, and cellphones. Other international brands, such as Intel, have decided to establish facilities in the Association of Southeast Asian Nations (ASEAN) member countries.

Ho said CMO`s two LCM plants in mainland China have effectively solved the labor-shortage problem at his company`s facilities in Taiwan and cut costs. The Ningbo (Jiangsu Province) facility`s monthly capacity has exceeded three million LCMs while the Foshan (Guangdong Province) plant is expected to continue expanding capacity in 2008, he added.

The president added that CMO is still evaluating the feasibility of setting up a LCM plant in Eastern Europe while considering the taxation policies and relatively-high labor cost there.

CMO would continue expanding its Ningbo LCM plant`s monthly capacity to five million modules, Ho said. But the production costs of facilities in China are expected to gradually ramp up in the future, while Vietnam now has many investment advantages such as lower labor cost, tax ratio, land cost, etc.
(by Quincy Liang)