LGD cash-strapped 8.5-generation LCD panel put on hold in Guangzhou

August 30, LGD of the original groundbreaking ceremony in Guangzhou on the LCD panel, for some reason delayed.
"In early August we received a notice in Guangzhou City, was invited to Aug. 30 on behalf of the line held LGD8.5 groundbreaking ceremony, but last week they received a notice to postpone the ceremony started, some of this sudden change." August 29, a TV company in charge told reporters the case.
The reporter learned from the Guangzhou Development Zone area, the opening ceremony of the delay was unilaterally proposed by South Korea LGD, but the Guangzhou municipal government is still in communication with the LGD, LGD Guangzhou adding 8.5 generation line item will not be canceled , but no later than the end of 2011 should start.
In November last year, after approval by the State Development and Reform Commission, Samsung Electronics Suzhou and Guangzhou LGD 7.5-generation line of 8.5 generation line when the start has been the focus of the panel industry. While the former was started on May 30 this year, while the latter twists and turns.
"The delayed start is mainly LGD reasons, because of its LCD panel business for two consecutive quarters of losses led to its cash flow is very tight."
"Guangzhou LGD high-generation LCD panel to participate in the selection of items from the negotiations on spent more than two years, and received approval in the LGD of reasons, but because of delays started, including the project lead person, including the Guangzhou-related leaders are very anxious. "The Guangzhou Development Zone, the source said.
Guangzhou LGD project delayed in the industry led to much speculation. A source close to LGD's color TV industry, said, "The delayed start is mainly LGD reasons, because of its LCD panel business for two consecutive quarters of losses led to its cash flow is tight, the first phase of the current need to invest $ 7 billion not in place, followed by the Guangzhou municipal government on the contract details are still in some negotiations still not complete agreement. "
In fact, LGD side has been working with the Guangzhou municipal government and the downstream machine Skyworth strategic partners to communicate the reasons is its LCD panel industry changes over the past year.
As of August this year, the global LCD panel prices have dropped 14 consecutive months, at the same time, the global LCD TV shipments declined to only 7% increase, even during the first half of this year the Chinese market increased only 5%. In this case, only the second quarter of this year, the world's four major panel makers appeared 80 million net loss, and including Samsung, LGD of the five panel makers, including the operating rate has fallen to 75%.
With the BOE (Hefei 6 Line, Beijing 8th generation line), and Suzhou Huaxing Power Samsung four-generation production lines have been started and in 2012 the global oversupply of LCD panels will be more severe.
In addition, LGD delayed start also has its own reasons. Last March, in the 8.5 generation line item LGD Guangzhou Development and Reform Commission for approval, while awaiting its approval and fear can not miss the golden age of the LCD panel, in its native South Korea to start building the second 8.5-generation line.
It is noteworthy that, has been hoping for LGD-generation line item to promote industrial restructuring and upgrading of the Guangzhou Municipal Government, the LGD project not want to see is a continued delay in the amount of investment reached 40 billion, boosting GDP at least one thousand billion in major projects.
According to sources, once again postponed the ceremony, the LGD in the request, mainly in the first phase of funding is still difficult to place hope in Guangzhou, given some support in the capital, the two sides are still on the details of a new round of cooperation negotiations.
In fact, for Samsung, LGD and other foreign giants panels, its investment in China is still the inevitable choice, because 50% of global LCD TV production base in China, but also more critical of China's tariff policy is expected to adjust.
Samsung Group research report shows that China plans in early 2012 the LCD module tariffs from the current 5% to 8% -10%, while the corresponding sub-class of LCD TV products will also be the current tariff 3% to 8% level, for both Samsung and LGD they need to accelerate construction of the LCD panel plant in China, may increase in response to China's future plans related to tariffs. Guangzhou Development Zone, insiders say, LGD Guangzhou 8.5-generation line is still expected to start in the year.
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