Oversea giants including LG Philips and major Taiwan firms are increasing investment to build LCD module plants and capitalize on a Chinese mainland market worth US$2.3 billion.

The growing demand for liquid crystal display units is based largely on surging sales of computers and flat panel TVs.

Analysts, however, warned that module plants generate limited profit and that the supply of large-size, high-margin LCD panels will depend on imports for the next few years.

LG Philips LCD, the world's biggest LCD panel maker, said recently it had signed a preliminary agreement to build a new LCD module plant in Guangzhou, Guangdong Province. Meanwhile, Taiwan-based Mindtech Investments Ltd announced a US$95 million joint deal with Shanghai SVA to establish an LCD module plant in Shanghai.

"The Shanghai-based plant will operate in line with our other new production facilities," SVA, which plans to invest several billion dollars by 2010 to build more advanced LCD panel manufacturing lines, said in a statement delivered to Shanghai Daily yesterday.

"LCD module manufacturing requires little technology," said Yue Ting, an analyst at Beijing-based CCID Consulting Co, a research f irm under the Ministry of Information Industry. "For large LCD TV panels, including 32 inch, 37 inch and even bigger models, China still depends on imports."

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