SVA (Group) Co Ltd will kick off construction of a local thin-film transistor liquid crystal display (TFT LCD) production plant in mid December in Shanghai.

The plant is the result of a joint commitment made last year to invest 114.6 billion yen between SVA and Japan-based NEC Corp.

Scheduled to start production in October next year with the backup of NEC's liquid crystal display technologies, the complex is expected to help SVA establish its position as a key player in the LCD industry.

To operate the project, which has been recently given the go-ahead from the central government, SVA and NEC have set up a joint venture with a registered capital of 50 billion yen, in which SVA holds a 75 per cent stake, while NEC has the rest.

Located in Minhang District with a production line whose equipment will all be imported, the facility will have an annual capacity of over 540,000 fifth generation thin film transistor LCD panels, a core component in mainstream LCD equipment, according to Tao Jun, spokesman for SVA.

SVA aims to become a top-notch Chinese enterprise by 2005 in terms of manufacturing, marketing and development of display products.

"We don't think the fifth generation TFT LCD technology is outdated; we'd rather take it as the most mature technology for now," said Tao.

While its products will supply both domestic and overseas markets, annual sales from the new joint venture are expected to hit US$1.2 billion by 2005, coupled with a profit volume of US$150 million, said Tao, adding that it's possible for the two companies to add another production line to the venture three years later if the market response is encouraging.

Currently in China, only SVA and Beijing-based BOE Technology Group Co Ltd are set to produce fifth generation TFT LCD panels. Earlier this year BOE acquired South Korea's Hyundai Hydis Co Ltd for US$383 million to take over the latter's production lines and technologies. BOE has announced plans to build a fifth generation production plant in Beijing.

Elsewhere, a total of 13 fifth (and above) generation TFT LCD production lines will be set up worldwide by 2004.

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