China's TFT LCD panel makers will consolidate into one company in the fourth quarter of 2007, with the government taking a stake in the venture. After the consolidation, China's government will be the largest shareholder, with a 36% stake while Shanghai SVA-NEC Liquid Crystal Display (SVA-NEC), BOE Optoelectronics Technology (BOE OT), and Info Vision Optronics (IVO) will hold stakes of 30%, 27% and 7%, respectively.

Last December, SVA-NEC, BOE Technology Group and IVO signed a memorandum of understanding (MOU) to integrate their production lines and form a new company in Shanghai, China. By the end of 2007, China is likely to add two new fifth-generation (5G) plants or one 6G plant.

Currently, SVA-NEC, BOE OT and IVO have a monthly capacity of 90,000, 80,000 and 30,000 glass substrates, respectively, from their 5G plants.

China-based panel makers are not yet able to build 7G or above plants due to technology barriers. Therefore, China players will not be a major competitor for Taiwan and Korea makers in the short term.