TAIPEI: Taiwan's two biggest LCD makers will sign strategic supply deals with top TV makers on the mainland, the companies said Friday, as they aim to develop mainland sales following a slump in the key US and European markets.

Spokeswomen from AU Optronics, Taiwan's largest LCD maker, and its chief local rival, Chi Mei Optoelectronics, both confirmed their chairmen were on the mainland to sign tie-up deals.

Both declined to give more details.

Shares of AU were up 3.4 percent in late-morning trade, while Chi Mei shares were up 4 percent, well ahead of a 0.1 percent rise for the broader market.

China's mainland is home to some of the world's largest TV makers, including names such as TCL Multimedia, Skyworth Digital and Konka Group, though many are unknown outside the domestic market.

Shares of TCL and Skyworth Digital were both up more than 5 percent, compared with broader market gains of 0.2 percent.

Last month, Beijing said it would buy $2-billion worth of Taiwanese flat screen monitors to support the industry during the global economic downturn.

It made the announcement amid rapidly warming ties with Taiwan under the eight-month-old administration of "President" Ma Ying-jeou.

As the global downturn saps demand from traditional major import markets, Beijing has embarked on a broader 4 trillion yuan ($585 billion) economic stimulus plan aimed at boosting domestic demand.

Part of that program aims to bring more prosperity to smaller towns and rural areas of the country, many of which have been lagging behind big cities as the economy booms.

Reuters

(HK Edition 01/17/2009 page5)