Taiwan govt says to support LCD industry

Taiwan Premier Liu Chao-shiuan said on Thursday the government will support the island's LCD industry, which competes with South Korean rivals, amid the global economic downturn. "We will help the industry as much as possible. I hope the government supports the industry and the industry supports its employees," the premier told reporters during a visit to Chi Mei Optoelectronics' (3009.TW) headquarters in the southern city of Tainan.

Liu did not elaborate.

His comments come after AU Optronics (2409.TW), the world's No.3 flat panel maker, said on Thursday it was open to proposals that could benefit the industry amid talk that the government could broker a consolidation of the struggling sector.

An AU spokeswoman declined to spell out what sort of proposals the company would consider, but said there were no merger and acquisition plans in the pipeline.

"We're very open to any proposals or suggestions on how to further improve things at the company and within the industry," she said.

The Chinese-language Economic Daily reported on Thursday that top AU managers met with Economics Minister Yiin Chii-ming, a day after the paper reported that rival Chi Mei's founder said he was open to mergers.

The AU spokeswoman declined to comment on the report, saying she had no way of verifying which of its executives the newspaper was referring to. The Economic Daily cited unnamed sources as saying AU hoped that the government would provide tax breaks to assist it in the construction of next-generation factories.

A slowing global economy has hurt LCD makers already reeling from a double whammy of oversupply and falling prices, which led both AU and Chi Mei to slash their fourth-quarter guidance in early December. Taiwan is home to some of the top producers of LCD panels that are used in TVs and laptop computers made by global brands such as Hewlett-Packard Co (HPQ.N) and Dell Inc (DELL.O).

They compete mostly with companies in South Korea and Japan, including industry leaders Samsung Electronics (005930.KS) and LG Display (034220.KS).

If the government intervenes to help the sector, it would be the second case of such assistance in Taiwan, where officials are currently making similar efforts to support the DRAM memory chip industry amid its worst-ever downturn.

Shares of AU and Chi Mei finished down 0.45 percent and 2.44 percent, respectively, lagging the broader market's 0.22 percent slide.