* Sees upside in panel prices in rebounding LCD market
* Bets on new applications, growth in China, emerging markets
* Expects new LCD plant in China to begin ops in 2012
By Baker Li and Argin Chang
HSINCHU, Taiwan, Dec 15 (Reuters)- Taiwan's AU Optronics Corp, the world's No.4 LCD maker, expects the display market to bottom out from the first quarter of next year in a rebounding global economy and due to fresh demand from new models such as 3D TVs, likely boosting panel prices higher.
AU also expects its planned new LCD plant to start operating in the second half of 2012 after getting approval from the governments from both Taiwan and China, paving the way to tape rising demand in China, which could overtake North America to become the world's largest LCD TV consumer in a few years.
"Overall, the economy is moving in a direction that we think is good," AU Executive Vice President Paul Peng said during the Reuters China Investment Summit.
"We are more optimistic for next year than this year," Peng said in an interview at the company's headquarters.
"There are some new applications and new technologies that we believe can spur new demand. Three-D, for example, has been widely promoted."
"Growth in the emerging markets has also been very fast," he said. "We sell about one third of our TV panels to China, so I see opportunities there," said Peng, who added that AU does not rule out setting up more module plants in China next year. He did not identify potential partners.
When asked if panel prices will go up in the first quarter, Peng said: "There is a chance.... I think prices will go higher for a period of time next year."
The LCD industry is mired in its latest down-cycle, with manufacturers losing momentum on concern that a debt crisis in Europe will crimp overall technology spending.
However, Asian makers of liquid crystal display (LCD) panels are rushing to set up production bases in China.
Taiwan's government will approve a plan by AU Optronics to build an LCD plant in China by the end of this month at the earliest.
AU needs to stay competitive with sector leaders Samsung Electronics and LG Display, which have already received official approval from China to build $6 billion worth of flat screen plants on the mainland.
AU's Taipei-listed shares have been flat in the past several months. The stock has fallen 22 percent this year, compared with the main TAIEX's 7 percent gain in the same period.
A source told Reuters last month that AU Optronics is in early talks to buy smaller rival Chunghwa Picture Tubes (CPT), which has about a tenth of AU's market value, in a move that would create the world's third-biggest LCD maker.
AU has said it has no plans to acquire CPT for now. (Editing by Ken Wills)