TAIPEI Aug 12 A proposed tie-up between Taiwan's Amtran (2489.TW) and South Korea's LG Display (034220.KS) would see the pair set up a factory in the Chinese city of Suzhou making LCD TVs, an Amtran spokesman said on Tuesday.
LCD maker LG Display said in March it was seeking alliances with other firms, such as Amtran, but did not provide any further details at the time. "We are negotiating and we have to go through details before we can jointly announce it," said Scottie Chiu, the spokesman of Amtran, a maker of the Vizio brand LCD TVs.
Chiu declined to give dollar figures or a timeframe for the venture.
Taiwan's Economic Daily news reported on Tuesday that the new venture between Amtran and LG Display would make backlights, panel modules and assemble televisions, and such vertical integration would help reduce manufacturing costs.
Both companies are likely to conclude the discussions to set up the venture by the end of the third quarter of this year, the newspaper reported.
The news came at a time when major LCD makers Samsung Electronics (005930.KS), LG Display and AU Optronics (2409.TW) (AUO.N) face a slowing global economy that is hurting consumer spending on new computers and flat-screen TVs.
However, the Economic Daily said Amtran's TV shipments to the United States remained stable in the second quarter.
Amtran was virtually unknown to consumers before it joined with its U.S. partner, Vizio Inc, in 2005 to penetrate the North America market.
Amtran shares had risen 1.8 percent by midday on Tuesday, defying a 0.5 percent fall on Taiwan's main TAIEX index .TWII.
LG Display shares jumped 2.5 percent, outpacing a 0.2 percent gain on the Korea Composite Stock Price Index .KS11. (Reporting by Baker Li, Editing by Dominic Whiting)