Taiwan's AU Optronics, one of the world's top five LCD makers, has started operations at a giant new plant in China that is expected to boost output by up to 50 per cent.

LCD panels produced by the plant in south east China will find customers nearby among the country's many consumer electronics manufacturers, executives said.

The new factory near the city of Xiamen will generate an extra $20bn in revenue for AU Optronics over the next five years, analysts from Taipei-based Masterlink Securities estimate. The firm reported revenues of $9bn in 2006.

AU Optronics will manufacture small, medium and large LCD panels at the plant, and is unusual in making such a wide range of LCD products.

Small and medium panels are used for consumer gadgets such as mobile phones and personal media players, while large panels form the basis of flat screen TVs and PC monitors.

AU Optronics estimates that the plant could be making five million small and medium LCD panels per month by the end of 2007, as well as half a million large panels.

"As China continues to shape the global economic landscape, our mainland China customers must have access to real-time and immediate support in order to be competitive and grow their businesses," said AU Optronics chairman K Y Lee.

"We recognised China's potential many years ago and have steadily increased our investment in the market over the past six years."

Lee, who is also chairman of consumer electronics manufacturer Benq, was briefly detained by Taiwanese prosecutors in April investigating insider trading charges related to Benq.

Benq and AU Optronics have loose links to giant Taiwanese PC maker Acer, at which Lee was formerly a senior executive.