Shanghai-based SVA Group and Japan-based Sharp Corp are in talks to try and revive co-production of LCD panels in a sixth-generation LCD panel plant in Shanghai, industry officials said on Monday.

The next generation flat panel display is one of the major sectors in a government plan to support information technology and electronics during the slump in the economy.

SVA announced last year an investment of at least 6 billion yuan (US$882 million) to build a sixth-generation liquid crystal display plant, the most advanced production line in the Chinese mainland, in Shanghai. But it has delayed the plan due to a lack of technical support and capital. The worsening economic environment and lower LCD panel prices also affected the plan, an SVA source, who declined to be identified, said.

Both SVA and Sharp declined to comment on the issue yesterday.

Sharp, the world's No. 3 LCD TV maker, will bring advanced LCD technology to SVA. It has sold its old production facility at its plant in Mie Prefecture in Japan to SVA for around 100 billion yen (US$1.1 billion) and outsourced the production to the Chinese firm, the Nikkei business daily reported.

The old LCD panel line produces LCDs used in laptops, monitors or LCD TV with screens smaller than 32 inches. The advanced line allows the Chinese maker to provide LCD panels for the bigger-sized TVs like 37-inch or 42-inch models.

SVA also has a fifth-generation LCD panel line that is jointly invested with Japan-based NEC.

Last week, China unveiled a plan to support the IT industry including major sectors like next-generation flat panel display, 3G technology, integrated circuit and software development.

(Shanghai Daily February 24, 2009)