LG Display signs deal for China plant, to own 70 pct

SEOUL Nov 3 (Reuters) - South Korea's LG Display Co Ltd (034220.KS), the world's No. 2 maker of LCD screens, said on Tuesday it had signed a deal with the Chinese city of Guangzhou to go ahead with a proposed $4 billion panel plant in China.

Asian panel makers are rushing to increase their presence in China, which is expected to become the world's biggest market for liquid crystal display (LCD) televisions within a few years.

Research firm DisplaySearch expects the Chinese LCD TV market will grow to 40.8 million units in 2012 from 25 million in 2009, overtaking North America and Western Europe.

LG Display had signed a non-binding agreement for the Chinese plant in August. It said in a statement on Tuesday that while no decision had been made yet regarding a specific Chinese partner for the project, it would be an LCD TV maker based in the country.

To operate the panel plant, LG Display and the city of Guangzhou will set up a joint venture to be capitalised at $1.3 billion, with LG Display providing 70 percent of the capital. The remaining 30 percent will come from Guangzhou city and the future Chinese partner, LG Display said.

Bigger LCD rival Samsung Electronics Co Ltd (005930.KS) also said last month it planned to build a panel plant in Suzhou, China, for a total investment of 2.6 trillion won ($2.2 billion). [ID:nSEO131216]

Japan's Sharp Corp (6753.T) will set up a venture with China Electronics Corp (CEC) to make LCD TV panels in Nanjing, while Taiwan's AU Optronics (2409.TW) is in talks with Chinese cities to set up a new plant. [ID:nT324063] [ID:nPEK154408] ($1=1185.2 Won) (Reporting by Rhee So-eui, editing by Jacqueline Wong)