By Kim Yoo-chul
LG Display plans to build a modular plant for liquid flat-screen television sets in Brazil with production set to begin next year.
The plan is in line with LG Electronics' expansion to meet rising demand for flat-screen TVs in South America, LG executives and analysts said.
LG Electronics is the biggest shareholder of the world's No. 2 producer of LCD panels with 37.9 percent.
"LG Display officials will conduct thorough research either this month or May to decide on the site for the plant," a high-ranking industry source said, Monday.
LG Display spokesman declined to comment.
The source added the project has been delayed for a year due to worries over the global recession.
LG Electronics has been operating a TV plant in Amazonia, Manaus, while its mobile phone and monitor plant are located in Taubate ― a city near Brazil's biggest commercial center of Sao Paulo, according to officials.
"More measures are needed to boost the production of LCD television sets," an LG Electronics official said.
The annual capacity of LG Electronics' LCD TV is three million. The initial output of LG Display's Brazilian LCD module plant is expected to be in that range.
LG Electronics aims to overtake a struggling Japan's Sony in the global LCD TV market this year by selling 18 million TVs.
According to DisplaySearch, a market research firm, Sony ranked No. 2, with a 14 percent share in terms of sales in 2008, followed by LG with 10.2 percent.
The global flat-screen TV and flat panels markets have been showing a sign of recovery.
Samsung Electronics and LG Display are planning to raise prices for its key components for flat-TVs, Samsung and LG officials said.
"LG Display's decision makes sense, considering a price rebound of the components and a short-term tightening of supply," Woori Investment & Securities said.
"Although weaker logistics channels are cited as a major drawback for LG and its flat-screen affiliate, the Brazilian plant will be a springboard to increase its market share in South and North America," the local brokerage added.
Shares of LG Display rose 2.97 percent to end at 31,200 won on the nation's main bourse, while LG Electronics fell 1.52 percent to close at 97,000 won per share, according to Korea Exchange (KRX).