BOE Technology Co Ltd and two Chengdu-based firms will co-invest three billion yuan (US$394 million) to build a 4.5-generation LCD panel manufacturing facility in the west China city, the Beijing-based firm said in a statement yesterday.

The 4.5G facility will manufacture liquid crystal display panels below 14.1 inch, which are used in laptop, automobile electronics and portable multimedia players.

BOE, Chengdu Hi-Tech Investment Group Co and Chengdu Industrial Investment Co will establish a joint venture with registered capital of 30 million yuan.

BOE will spend 9.54 million yuan for 18.18 percent and the two Chengdu-based firms will hold the remainder.

"Small size doesn't mean lack of profit," said Liu Ruilin, president of Tianma Microelectronics Co Ltd, which makes small-sized LCD panels."The TV and monitor LCD panel market is too crowded and risky."

It was the latest move for BOE's new strategy announced last month to invest a total of 3.1 billion yuan to build a plant to make LCD panels measuring smaller than 14 inches.

BOE now focuses on 5G LCD panel manufacturing of 17-inch LCD monitors and TVs, which caused the company huge losses after competition from rivals such as Sharp Corp and Samsung Electronics.

The higher generation of LCD panel production line can make huge LCD panels but it needs more investment.

Shares of BOE closed at 11.31 yuan yesterday, a 2.07-percent drop from the day before. But the share price represented a 40-percent jump from September 1 when the firm announced it would invest on 4.5G LCD.

BOE's new move helped it to avoid duplicated investment in the home-grown LCD panel industry as local rival SVA Group seeks to build a 6G line in Shanghai for LCD TVs, industry insiders claimed.

(Shanghai Daily October 11, 2007)