CPT Increases Investment in Xiamen

Taipei, Jan. 23, 2006 (CENS)--Taiwan's Chunghwa Picture Tubes Ltd. (CPT), No. 3 maker of thin film transistor-liquid crystal display (TFT-LCD) panels on the island, and Xiamen Overseas Chinese Electronic Co., Ltd.(Xoceco), the largest LCD TV exporter in mainland China, recently signed a investment memorandum of understanding (MOU) and a plant-construction investment agreement with Xiamen Torch Hi-tech Industrial Development Zone (XM Torch).

Total investments to be made by the two firms are expected to reach 3 billion Renminbi (RMB) and their common goal is to conduct mass production at the world's largest color flat panel display (FPD) TV production base in Xiamen, Fujian Province of China.

CPT plans to set up its fifth rear-section LCD module (LCM) assembly plant in XM Torch. CPT just acquired a 32.64% stake in Xoceco in late 2005, making it the largest single shareholder in the Chinese company. The cooperation project has made Xoceco the first color-TV maker in China boasting panel supply on its own.

According to CPT's MOU signed with XM Torch, the Taiwanese company plans to invest US$200 million to set up a TFT-LCD module facility at a 600, 000 square-meter plant complex in the zone. Currently, Xoceco runs a 500, 000 square-meter FPD TV manufacturing zone in Xiamen with a total investment of about 1.3 billion RMB and plans to further expand the zone.

At the signing ceremony, C.H. Lin, chairman of CPT, said that he hopes Xoceco's annual capacity of FPD TVs to further expand to eight million to 10 million units over the next five years, thus making the firm rank among the world's top-five makers in the line and become the most important production base of FPD TVs in the world in 2010.

The CPT-Xoceco tie-up has made CPT the first TFT-LCD panel maker in Taiwan to acquire a downstream brand maker in China, as part of its efforts to develop into a leading global LCD TV maker as well as the No. 2 LCD TV manufacturer in China, trailing Hisense Co., Ltd.

CPT is a subsidiary of the Tatung Group, a leading electrical machinery and information technology (IT) conglomerate in Taiwan. Tatung' s senior officials pointed out that CPT's tie-up with Xoceco is an import step of Tatung's global business deployment scheme and is expected to greatly help the group's future business development in China.

CPT is also a major global supplier of cathode-ray tubes (CRTs). The firm moved its CRT production to Fuzhou, Fujian Province of China in 1994 and has successfully spawn the development of a group of optoelectronics-parts makers there. CPT is a star enterprise in Fujian and wins great attention from China's central government.