Thursday, December 30, 2010

More breathing room, please!

l  After being granted approval by Taiwan's Ministry of Economic Affairs (MOEA) last week to set up a US$3 billion manufacturing plant in China, AU Optronics (TWSE AUO 2409) urged the government this week to relax restrictions over Taiwan LCD panel-display makers’ investment in China so that they can better compete with South Korean suppliers in the mainland market.

l  Furthermore, AUO suggested that the current ban on the display-panel manufacturers’ investments in their Chinese counterparts should also be removed. In response, the MOEA has pledged to review and consider such a request.

l  Since its investment plan was eventually approved after under MOEA review for almost a year, AUO felt the island’s LCD flat-panel makers have already missed the most timely period for setting up production facilities in China.

l  Worse yet, while Chinese authorities were expected to give swift approval to investment plans like AUO’s when the application was first submitted to MOEA nearly a year ago, China could now delay the process of approval because the mainland already has its own LCD display plants with relatively advanced technologies.

l  Other Taiwanese industries, particularly petrochemical and solar energy, may experience the same fate if the current ban on investment in China continues.


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