LG Display in deal for China LCD plant

SEOUL (Reuters) - LG Display (034220.KS) on Tuesday said it had signed a non-binding agreement to build an LCD panel plant with the Chinese city of Guangzhou, and would like to see a Chinese television maker come on board for the project.

Although LG Display did not disclose details, a local newspaper reported that the company was poised to invest 5 trillion won ($4.03 billion) in the facility.

The plant would be an eighth-generation facility, LG Display said, capable of making large-size panels for television sets.

"It would be good if a Chinese TV maker could become a shareholder" in a potential joint venture, LG Display CEO Kwon Young-soo told a press event, citing companies such as Hisense (600060.SS), Haier (1169.HK) and Skyworth (0751.HK).

Asked if Samsung Electronics' (005930.KS) had plans to build an LCD plant in China, Samsung LCD unit president Chang Won-kie also expressed interest in the possibility of having a seventh or eighth generation facility there, but added that nothing had been decided.

DEAL BETWEEN RIVALS

Separately, South Korea's Ministry of Knowledge Economy said in a statement that Samsung Electronics, the world's top LCD leader, would receive 17-inch computer monitor screens from LG Display, while Samsung would supply LG Electronics (066570.KS) with 22-inch monitor panels.

It said the total value of the deal would be 105.6 billion won ($83.5 million).

The Ministry said it expected the scope of the deal to be expanded to include other types of LCD screens, although an immediate deal involving television panels would be difficult as the two sides used different technologies.

The ministry said the computer monitor cross-sourcing agreement would save about $83 million in import costs as these products are usually bought from Taiwan. The deal is also aimed at opening the way for more cross-purchasing agreements between the rival groups.

Shares in Samsung Electronics fell 1 percent to close at 775,000 won, while LG Electronics was down 3.1 percent. LG Display, a part of the LG Group, rose 2.6 percent, while the wider market .KS11 posted a 0.67 percent drop.

The outlook for South Korean and Taiwanese LCD makers has brightened recently as fears of second-half oversupply have faded because of a shortage in glass substrates, and on growing demand from China boosted by a government stimulus package.

($1=1245.6 Won)

(Reporting by Marie-France Han; Editing by Jonathan Hopfner)