CPT to pour NT$100 B. into 6th-generation TFT-LCD panel production in 3 years

Yokohama, Nov. 3, 2003 (CENS)--Taiwan's Chunghwa Picture Tubes, Ltd. (CPT) chairman and president C.Y. Lin recently announced that his company would invest NT$100 billion (US$2.94 billion at US$1: NT$34) within three years in expanding production of thin film transistor-liquid crystal display (TFT-LCD) panels and plasma display panels (PDPs).

Lin said his company's sixth-generation TFT-LCD panel plant in Taiwan is scheduled to begin mass production in the second quarter 2005 and TFT-LCD TV panels would account for 50% of CPT's total revenue in the future.

According to Lin, CPT's investment in its planned sixth-generation LCD panel facility will be raised to NT$90 billion (US$2.65 billion) from originally planned NT$58 billion (US$1.71 billion), while the scheduled monthly capacity will be hiked to 90,000 panels from 60,000 panels. In addition, Lin said, CPT would start installing its second PDP TV panel production line in Taiwan in November.

Industry sources said that the scheduled capacity of CPT's sixth-generation panel plant would be higher than those of the company's major rivals, LG-Philips of South Korea and AU Optronics Corp., both of which announced plans to set up such panel facilities with a monthly capacity of 60,000 TV panels.

CPT was the first in Taiwan, and the fourth in the world, to announce sixth-generation panel production projects.

Lin said CPT would cooperate with Taiwan's SinTek Photronic Corp. to produce color filters for the sixth-generation panel plant, and the color filter venture would cost about NT$10 billion (US$294.12 million) of the NT$90 billion (US$2.65 billion) investment in the sixth-generation plant project.

Lin participated in the 2003 PDP International show in Yokohama to contact relevant equipment suppliers for the sixth-generation plant project. The chairman and president claimed that after the sixth-generation panel plant starts mass production, the revenue share of CPT's TFT-LCD TV panels would jump to 50% from the current 15%.

Lin also stressed that CPT would not withdraw from the PDP TV panel investment. CPT would start installing its second PDP TV panel production line this month, Lin said, and the new line is scheduled to begin mass production in May 2005 with a monthly capacity of 75,00 TV panels, over five times that of the company's first line. With the added capacity from the new line, Lin said, CPT is expected to win an 8% share of the global PDP TV panel supply.

In the coming three years, Lin noted, CPT would pour about NT$30 billion (US$882.35 million) per year into the sixth-generation TFT-LCD panel facility. This year, Lin added, CPT has got sufficient funds of over NT$30 billion (US$882.35 million) for the first-stage investment by issuing exchangeable corporate bonds (ECBs) and global depository receipts (GDRs), and issuing new shares for capital increment. CPT would raise the needed investment capital next year through issuing 500 million ECBs and 500 million GDRs as well as applying for syndicated bank loans, Lin said.

According to Lin, each sixth-generation panel substrate can be directly and efficiently cut into four substrates for 4.5th-generation panels. Such generation-continuity production deployment would let CPT enjoy higher flexibility in producing both panels for LCD monitors and TVs.

CPT is also the sole Taiwan company simultaneously owning TFT-LCD and PDP panel production lines. The company debuted its latest 46-inch extended graphics array (XGA, with resolution of 1024 x 768 pixels) high-level PDP panel product at the 2003 PDP International and announced that it would start mass production by the end of the year. The panel model can simultaneously own two resolutions, including video graphics array (VGA, 640 x 480 pixels) and XGA.

Lin deemed that the over-42-inch PDP TV models would co-exist with LCD counterparts in the large-sized TV market with respective advantages. The chairman said that his company would gradually expand the PDP TV panel models into 46- and 50-inch ones.