Late last year, South Korea gave approval to Samsung and LG Display to build plants in China. Last month, Taiwan’s government removed the ban on mainland China fabs. Panel makers would be free to set up Gen 5 (and lower) fabs on the mainland, but the Taiwan government will only permit three fabs of Gen 6 or greater.
Now (Surprise, surprise!) the Chinese government wants control and says it will allow only four or five next-gen fabs to be built on the mainland. Naturally, Chinese manufacturers (TCL, BOE, IVO) have approval already for Gen 8.5 projects, leaving only two more possibilities. In fact, AU Optronics, the world’s 3rd-largest flat panel maker by revenue after Samsung and LG Display, will build a 7.5-generation flat-panel plant in China and may even take a local partner.
China will likely suck up all the local production for the local market. The issue with China, as always, is the introduction of high technology that finds its know-how transferred quickly to local producers (with government tacit or in tacit preference and support) and then exports flood overseas markets.
Check out the official story from Bloomberg: http://www.bloomberg.com/apps/news?pid=20601204&sid=a1NiLLjIYdgg