China-based?electronics manufacturer TCL Corp yesterday started construction in Huizhou, Guangdong Province, on the final phase of its biggest liquid crystal display production base as demand rises in the LCD television market.

The three-phase facility, with a total investment of 2.6 billion yuan (US$382 million), will boast on completion annual output of 5 million LCD TVs, 8 million LCD modules, 20 million DVDs and 6 million LCD components.

The phase two plant started production yesterday. It cost 600 million yuan and covers an area of 53,700 square meters with eight assembly lines.

The plant is expected to produce 700,000 LCD televisions by the end of this year. It's annual capacity is 3 million TVs between 15 and 55 inches as well as 2 million larger-sized TVs.

The first phase, which cost 1.2 billion yuan, was put into operation with an annual production capacity of 8 million LCD modules at the end of last year.

"The integration of the upstream business could sharply cut costs and lift our competitiveness in LCD TVs," said Li Dongsheng, president of TCL Corp. "It can also expand our capability to meet booming demand from home and abroad."

Industry experts said domestic TV makers have successfully snared market share in LCD TVs by expanding into the upstream business, laying a solid foundation to catch overseas giants.

"The project signals China's TV makers such as TCL have moved forward to establish their own industry chain and grow core competitiveness in the LCD TV era," said Lou Qinjian, vice minister of Ministry of Industry and Information Technology.

Domestic makers have taken more than 60 percent of the flat panel market share that was once dominated by overseas firms such as Samsung, Sony and Sharp, according to United States-based DisplayResearch.

The research firm said the LCD TV market in China has surpassed North America to become the world's largest with this year's sales estimated at 23.6 million units, a 76 percent jump from a year ago.

TCL has also rebuilt its manufacturing bases in Wuxi, Jiangsu Province, and Chengdu, Sichuan Province. Both will mainly produce LCD TVs.