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JULY 2006

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SEMICONDUCTOR & ELECTRONICS


Flat Screens Finding Homes All Over the World – Demand Drives Location Decisions

While LG and Royal Philips plan to build a new LCD plant in Wroclaw, Poland, Sharp announced in April its plans to invest US$56 million and employ 800 at a new LCD module plant in Torun, in Kujawsko-Pomorskie Voivodship in the north-central part of the country. The modules will be used for LCD TV manufacture in Spain and Germany. On May 31, 2006, worldwide production of Sharp's AQUOS LCD TV surpassed the 10 million mark, doing so in five years and five months. That's one reason it's also expanding production with two plants at its home-country complex in Kameyana, below.
   In the hot LCD sector, much expansion is happening in Asia, particularly in China, although higher-end LCD production remains in Taiwan and Japan. Quanta Computer, for example, is expanding existing Chinese capacity to produce flat screens for Toshiba. Quanta also makes LCDs in China for Philips and Sanyo.
   China's lower labor cost isn't the only attraction – the world's most populous nation is becoming more affluent, and consumer demand for cool new technology is rising. And where electronics manufacturers go, their suppliers are not far behind.
   "For us, its all about Asia," says Beth Mentesana, spokesperson for Lehigh, Pa.-based Air Products, a supplier of bulk and specialty gases. "Flat screens are thriving for us. It's almost 50 percent of our electronics business right now." And this activity is taking place almost exclusively in Asia, Mentesana notes. "We are building new plants in that part of the world, but we are not adding capacity in the states," she says.
   A new Air Products facility under construction at Tainan Science Industrial Park will supply gasses to an adjacent a chip fab and an LCD manufacturer.

LCD Manufacturers Looking to
the Other East-Eastern Europe
   Consumer markets are opening up in Eastern Europe as well, where accession to the EU and an influx of foreign investment have given citizens more disposable income to spend on gadgets. LCD manufacturers are also looking here for good locations.
   LG, partnering with Royal Philips, recently announced plans to build a new plant in Wroclaw, Poland, to produce 3.5 billion flat screens each year, all for the European market, including Russia. Minnesota based 3M, which supplies LG.Philips with the optical film for LCDs, just announced its own Polish location decision, to build a new plant not far from the LG.Philips facility.
   Looking ahead, the world appetite for ever larger, ever clearer TV screens will continue, even as the technology inside them shrinks. Microprocessors the size of a pinkie finger nail will soon dominate, fueling a new race for the next innovation – and the need to retool or re-locate once again.

   Ann Moline is a Washington, D.C.-based business journalist who covers land use and international economic development. She is a collaborating author of two books from the Urban Land Institute, "Just-in-Time Real Estate" and "Green Buildings."

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