Several companies based in South Korea and Taiwan plan to open up manufacturing facilities in China
South Korean
tech companies Samsung and LG have been granted permission to develop
LCD manufacturing plants in China. The companies are working to
adjust
to growing global LCD demand and they must find cheaper
facilities, even if that means building additional plants outside of
South Korea.
"The government has approved
exporting those core LCD technologies to China, considering the need
to manage the fast-growing Chinese market locally and economic
cooperation between South Korea and China," the prime minister's
office announced in a statement.
Many tech companies rely on
China for cheap labor, custom tax exemptions, and large manufacturing
facilities. The United States, Canada, England, and numerous
other countries call upon Chinese-made products sold to consumers,
but several companies have been criticized -- and sometimes punished
-- by host governments. South Korean and Japanese companies,
for example, often undergo strong public scrutiny when they attempt
to offshore manufacturing processes.
The Samsung Chinese plant
is expected to open in 2012, and will manufacture 60,000 glass
substrates per month. LG's facility is expected to manufacture
up to 120,000 glass substrates per month once the plant opens during
Q1 or Q2 next year.
In exchange, either the companies or the
Chinese government will pay South Korea a portion of the revenue
generated by the tech companies' manufacturing plants in China.
AU
Optronics, an LCD company based in Taiwan, also is pleading with its
government to adjust its cross-straight investment agreement with
China so it can build LCD plants outside of Taiwan. A growing
number of tech companies based in Taiwan have asked the country's
Economic Minister to ease legislation so they have the ability to
more easily move factories outside the country.
"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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