LG.

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Philips LCD held a groundbreaking ceremony for its new back-end module production plant in Wroclaw, Poland. The new plant is a result of an investment agreement LG.Philips LCD signed with the Polish government and Wroclaw's municipal government in September of last year.

LG.Philips LCD is the first global LCD panel maker to establish a production base in Europe. The Korean firm plans to start mass production at the plant in March of 2007 with an initial capacity of 3 million modules per year. The new plant will reach its design capacity of 11 million units per year by 2011.

According to DisplaySearch, Europe has emerged as the world's largest market for LCD TVs, with a 41% market share in 2005 (based on units), ahead of Japan and North America. DisplaySearch expects the European LCD TV market to record a compound annual growth rate of 29.6% per year from 2005, generating three-fold growth by 2009.

Separately, LG.Philips LCD has decided to reduce its worldwide production to address inventory concerns and better balance its short term supply with demand. The company recognize weaker seasonal demand during the second quarter, which has increased its inventory to about four weeks. The average selling price per square meter of glass at the end of the second quarter of 2006 is anticipated to decline by a mid-teen percentage quarter-end on quarter-end, says LG.Philips LCD.