LG.Philips aims to make 11 mln modules by '11 Poland

SEOUL (Reuters) - LG.Philips LCD Co. Ltd. (034220.KS: Quote, Profile, Research, Stock Buzz), the world's No.2 maker of large-size LCD panels, said on Sunday that its flat screen assembly plant in Poland had started mass production and was planning to produce 11 million modules annually by 2011 to meet booming demand for flat TVs in Europe.

LG.Philips (LPL.N: Quote, Profile, Research, Stock Buzz), a joint venture between LG Electronics Inc. (066570.KS: Quote, Profile, Research, Stock Buzz) and Philips NV (PHG.AS: Quote, Profile, Research, Stock Buzz), plans to expand the annual production capacity of the plant from an initial 3 million units to 11 million units by 2011.

The plant, located in Kobierzyce near Wroclaw in southwestern Poland, will mainly assemble liquid crystal display (LCD) panels over 32 inches in order to supply makers of flat screen TVs.

The total investment for the plant is estimated at 429 million euros ($572.9 million) through the year 2011.

Japan's Toshiba Corp. (6502.T: Quote, Profile, Research, Stock Buzz) took a 19.9 percent stake in the LG.Philips plant in order to ensure a stable supply of panels for its TV sets.

With global demand for LCD panels skyrocketing, especially in Europe, central and eastern European countries have become locations of choice for flat screen makers thanks to their cheap and well-educated workforce and convenient location.

LG.Philips said many of its LCD customers and partner firms had already built or are building facilities in the region. LG Electronics currently operates an LCD TV plant nearby and Toshiba is building an LCD TV plant nearby, with production scheduled to start in August 2007.

Meanwhile, Philips and Japan's Matsushita Electric Industrial Co. Ltd. (6752.T: Quote, Profile, Research, Stock Buzz) have TV plants in Hungary and the Czech Republic while Japan's Sharp Corp. (6753.T: Quote, Profile, Research, Stock Buzz) is currently building an LCD TV plant to complement its LCD module assembly plant near Torun in northeastern Poland.

South Korea's Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research, Stock Buzz), the world's biggest maker of large-size LCD panels said in March it had picked Slovakia as the site of its new 320 million euro LCD assembly plant.