To increase its competitiveness in the Chinese LCD TV sector and to raise the profitability of its LCD TV sets, Konka has decided to invest CNY886 million to set up an LCD module company to develop the LCD module lines.
Wholly owned by Konka Group, the LCM company has registered capital of CNY350 million. The total investment in the fixed assets is about CNY886 million, including eight LCM production lines with an annual capacity of about 2.4 million. The company is expected to start production in the fourth quarter of 2008.
According to Konka, the project will reduce its production costs of LCD TV sets by 10%.
Because of the great investment and high risk in the prior period of LCD panel production, LCD manufacturers' module lines in China become the first target for Chinese color TV manufacturers' entry into this upstream industry. In September 2007, Hisense successfully entered the LCM sector with the help of the self-established LCM lines of Chi Mei Optoelectronics and the Xiamen Overseas Chinese Electronic Co., Ltd. In April 7, 2008, Skyworth also entered this sector by cooperating with LG Display.