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The world's largest LCD glass substrate maker Corning Inc announced it will build a 5th generation liquid crystal display (LCD) substrate finishing facility in Beijing, the first of its kind on the Chinese mainland.

The US-based company declined to disclose the amount invested or time frame for the completion of the project for competitive reasons. But, such a factory normally costs around 10 billion yuan (US$1.25 billion), said Yang Lei, analyst with Beijing-based research house CCID Consulting.

Glass substrate is one component of an LCD panel, which is used to produce screens for PC monitors and flat TVs.

Clark Kinlin, chief executive officer of Corning Greater China, said, "(The new facility) is further proof of our commitment to the fast growing Chinese LCD industry."

According to CCID, in 2005 the Chinese LCD TV industry used 4.625 million units of LCD panels, an increase of 481 percent over 2004.

Yang said Corning accounts for 50 percent of the global LCD glass substrate market, and is one of only four companies in the world capable of producing LCD glass substrate for PCs and TVs.

The Beijing facility will begin with glass finishing, and then assess the need for other operations on the basis of market and customer demand, said the company.

Speculation about the location of the new facility has been rife since Corning earlier revealed its decision to build such a facility in China. Shanghai and Beijing were deemed as hot candidates to house the facility because the two cities have manufacturing centers of major domestic LCD panel makers.

Beijing-based BOE Technology and Shanghai-based SVA Group, two major LCD panel makers in China, have installed the fifth generation LCD panel lines, which began mass production last year.

"After a thorough evaluation process of several locations, Corning determined that Beijing is the most appropriate location for our finishing facility," said Paul Rogoski, director of Corporate Communications of Corning.

BOE's fifth generation LCD panel line and Corning's new facility share the same location, Beijing Economic Development Area.

Yang of CCID believed that Corning's facility in Beijing would have a huge impact on LCD panel makers in China.

She explained the transportation of LCD glass substrate is costly and very complicated.

"So, a complete industrial chain formed around a LCD panel maker is helpful to a panel maker," said Yang, adding: "The Beijing facility, of course, will lower the overall cost of LCD panels for BOE."

But, Yang had not expected the new facility to be based in Beijing.

She said, "Beijing must have offered Corning a more competitive package with favourable clauses."

Due to the increasing demand for LCD panels, the LCD panel industry in China has become more active recently.

LCD panel projects are reported to have kicked off or are planned to begin in Kunshan of Jiangsu Province, Shenzhen of Guangdong Province and Dongying of Shandong Province.

(China Daily April 27, 2006)