Chi Mei keeps LCD output plan, Vietnam plant on hold

TAIPEI, Aug 15 (Reuters) - Chi Mei Optoelectronics Corp (3009.TW), Taiwan's No.2 LCD maker, said its plan to reduce output in an industry downturn remained unchanged, and it has suspended a plan to build an LCD module factory in Vietnam. A company official confirmed on Friday a local newspaper report that Chi Mei President Ho Jau-yang said on Thursday his company's previous plan to cut production of liquid crystal displays (LCDs) has not been changed.

Two weeks ago, Chi Mei said it would follow the lead of several peers, such as AU Optronics Corp (2409.TW), and cut its output in the third quarter by about 15 percent from the second quarter after demand for PCs and flat-screen TVs slowed.

But Ho said the display market could have hit a bottom in July and demand is picking up this month.

Chi Mei has also decided to suspend a plan to build an LCD module assembly plant in Vietnam, said the official, who delined to be named.

"We still need some time to evaluate," the official said, adding that Chi Mei had previously expected the module plant to start construction next year. The official did not say when a decision would be taken.

At 0336 GMT, Chi Mei shares jumped 2.8 percent and AU shares rose 0.7 percent, outperforming the main TAIEX's 0.1 percent gain. (US$1=T$31.4) (Reporting by Baker Li, editing by Dominic Whiting)