Chinese panel maker BOE plans 5.5-generation AMOLED plant

China's largest flat panel maker BOE Technology Group Co. plans to build a next generation display plant for active-matrix organic light-emitting diode (AMOLED) panels, company officials said Wednesday, in a move to tap into the fastest growing segment in the display industry. BOE will invest 22 billion yuan (US$3.5 billion) to build a 5.5-generation AMOLED plant in Ordos, Inner Mongolia, the officials said. Global production of AMOLED panels is expected to triple next year. According to U.S.-based market research firm DisplaySearch, production of AMOLED panels will rise to 2.6 million square meters in 2011 from 890,000 square meters this year, largely led by Samsung Mobile Display Co. The South Korean manufacturer's new 5.5-generation AMOLED plant will begin to operate at full capacity early next year. AMOLED panels, mostly used in mobile phones and small-screen tablet computers, are considered to be good alternatives for dominant liquid crystal display (LCD) panels. The over-production of LCD panels led to falling prices, while supply of AMOLED was very tight in 2011. BOE said that in return for its investment, the Ordos city government will give BOE warrants of at least 1 billion tons of coal, which is worth about 10 billion yuan. BOE has no coal development expertise. The final agreement has yet to be signed. Some market watchers are skeptical of the plan, saying a flat panel fabrication plant cannot be operated in a city like Ordos, where a supply chain is not fully developed and a plentiful water supply is not available.