HKC is planning to invest CNY40 billion (US$6.36 billion) to build an 11G LCD panel production line in Henan, China, according to industry sources. The China-based HKC's move comes on the heels of fellow maker BOE Technology's announcement of its project to construct the world's first 10.5G LCD line.
Based on information released by the local government in Zhengzhou, the planned 11G line will focus on manufacturing 65- to 150-inch 4K/8K Ultra HD and curved panels.
HKC will be the world's fifth panel maker to enter the 10.5/11G segment, following the steps of BOE Technology, China Star Optoelectronics Technology (CSOT), Foxconn Electronics and LG Display, said the sources.
A total of nine 10.5G/11G fabs, including seven in China, are expected to come online by 2020, the sources indicated.
The concentration of the 10.5/11G in China is due to strong policy support and handsome subsidies provided the central and local governments, the sources commented.
For instance, BOE was exempted by the local government in Fuzhou, China from repaying a CNY6.3 billion (US$969 million) loan it provided for construction of an 8.5G LCD fab in the city, which kicked off volume production recently.
It is calculated that it requires a capital input of CNY40-50 billion to build a 10.5G or 11G line in China, and a panel maker can initiate such an investment plan if it is able to gather up to 20% of the needed capital as government subsidies and bank loans will make up the remaining 80% of the financing, said the sources.
While considering such a subsidy policy unreasonable and unfair competition, some Taiwan-based panel makers have said that the best way for them to fend off such competition is to optimize their production capacity for value-added and high-end products.