This excerpt taken from the LPL 6-K filed Apr 8, 2008.
LG Display Forms a Strategic Alliance with Skyworth
Seoul, Korea (April 7, 2008) LG Display(NYSE: LPL, KRX: 034220), a leading innovator of thin-film transistor liquid crystal display (TFT-LCD) technology, announced that it has forged a strategic alliance with Skyworth Digital Holdings Limited(HK:0751), a leading television manufacturer in the Peoples Republic of China(PRC), to better position itself in the promising Chinese LCD TV market.
The two companies announced today that they reached an agreement in January earlier this year under which Skyworth acquired a minority equity stake in LG Displays Guangzhou module plant. This agreement will allow Skyworth to secure a stable supply of LCD panels, thus gain a more advantageous footing in the PRC, which has emerged as the worlds largest LCD TV market. On the other hand, LG Display will secure a better customer alignment for its LCD TV panels ahead of the launch of the companys 8th generation TFT-LCD plant, P8, slated for the first half of 2009.
In addition, a signing ceremony regarding an agreement to set up an R&D Center in Guangzhou took place at a Skyworths plant in Shenzhen, Guangdong Province, the PRC, on April 7. Each of the Parties will invest 25 million RMB(Renminbi), respectively, to set up a R&D Center with the purpose of co-development activities between LCD modules and TV sets.
Skyworth also announced that it will build a LCD TV production plant adjacent to LG Displays Guangzhou module plant. Therefore an LCD module plant, R&D Center and TV production plant will be co-located in the Guangzhou Economic and Technology Development Zone. This co-location is expected to enable timely production, lower logistics costs and efficient supply chain management.
Eddie Yeo, Executive Vice President and Head of LG Displays TV Business Unit said, LG Display has been pursuing business transformation. The broad strategic alliance with the leading television manufacturer, Skyworth, marks a starting point, and we believe it will enable us to reinforce our presence in the PRC LCD TV market.
Zhang Xue Bin of Skyworth said, The alliance with LG Display will greatly help Skyworth strengthen its position in the PRC LCD TV market. We are confident that our partnership with a global LCD leader, such as LG Display will enable us to supply competitive products with advanced technology to our customers.
Construction of LG Displays Guangzhou module plant began in August 2006. The module plant started mass production in December 2007 with annual production capacity of 8 million units, most of which are for LCD TVs and monitors. The annual production capacity is set to rise to 20 million units by 2010.