China's largest TFT-LCD maker, Beijing BOE Optoelectronics Technology Ltd. (BOE OT), is dumping most of its interest in large-sized TFT-LCD panels after failing to make it profitable.
Instead, the company will focus on small-sized panels for mobile phones and other portable applications, such as notebook PCs and tablet PC modules.
BOE OT will sell a 73 percent stake of the troubled unit to an affiliate, which will help it avoid a delisting on the Shenzhen stock market.
BOE OT lost $155 million in its 5G TFT-LCD business last year. Dongsheng Wang, CEO of BOE OT, said the shortage of funds, high costs of imported material, and lower product prices caused the decline of its 5G TFT-LCD business during the past two years.
"Mid- and small-size TFT-LCD business has larger developent potential and it will become the company's core business in the future," said Wang, in a statement.
The company plans to enlarge its mobile and portible display business to roughly $260 million during the next two to three years. It is currently $52 million.
BOE OT began mass production on its 5G line in 2005. The company is currently producing 80,000 glass sheets per month. Each sheet is 1100mm x 1300mm.
The company said the transfer won't interfere with a merger planned for June with two other local TFT-LCD makers. The merged company will together operate six legacy LCD lines with a combined capacity of about 200,000 panels per month.
Production will focus on 15-, 17- and 19-inch panels, suitable only for commodity notebook PCs and monitors.
The Chinese government is targeting the LCD industry for major growth, hoping to see a handful of fifth-generation LCD production built lines by 2008, with additional sixth- and seventh-generation lines slated for 2010.
Currently, China is home to two operational fifth-generation fabs and another that will come online soon.