UPDATE 1-Asahi Glass to build Taiwan plant, mum on further plans

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TOKYO, July 18 (Reuters) - Japan's Asahi Glass (5201.T) plans to start building a fifth LCD glass-making factory in Taiwan next month to meet growing demand for TV panels and PC monitors, but it was mum on any further expansion plans.

Asahi Glass, which is playing catch-up with Corning Inc (GLW.N) while fending off home rival Nippon Electric Glass (5214.T), said on Friday it would invest roughly 20 billion yen ($188 million) in the plant, expected to be completed next year.

Taiwan media reported the previous day that Asahi Glass had long-term plans to build an additional five plants and double capacity, but spokesman Yoshihiko Saito said the report was speculation and nothing was decided, and declined further comment.

Expansion at Japan's biggest glass maker comes as client liquid crystal display makers brace themselves for an escalating price war.

Analysts warn that the LCD sector is headed for another period of oversupply even as big LCD makers such as Samsung Electronics Co Ltd (005930.KS), LG Display Co Ltd (034220.KS) and Sharp Corp (6753.T) stand ready to make larger lines.

The new plant, which will be able to make 8th generation glass, will mainly supply glass to Taiwan firms such as AU Optronics (2409.TW) and Chi Mei Optoelectronics (3009.TW).

Shares of Asahi Glass, which also makes glass for solar panels and cars, closed down 1.3 percent while the benchmark Nikkei average .N225 was down 0.7 percent.

AU Optronics fell 6.5 percent and Chi Mei tumbled 6.7 percent while the main TAIEX share index was down 2.3 percent. (Reporting by Mayumi Negishi; Editing by Chris Gallagher)