The Ministry of Economic Affairs announced on Tuesday that restrictions on investment in China for the domestic panel industry will be lifted in a bid to boost the competitiveness of Taiwan's panel manufacturers on the global market. And companies such as AUO and Chimei are expected to be the first beneficiaries of the new policy.

The Ministry of Economic Affairs announced on Tuesday evening the lifting of flat panel restrictions on investment in China.

The MOEA's previous-generation limitation for Chinese production plants has also been revised to allow panel makers to set up production plants in China at the same level as in Taiwan.

6G and above panels are mainly used in LCD televisions and tabletop display units, and China's color television market is growing at an exponential rate.

Although restrictions have been lifted, panel manufacturers will have to file applications with a technology review committee and comply with equal investment in Taiwan and leading production capacity policies.

AUO, whose application to establish a 7.5G panel plant in China was previously approved, will have to apply again if it wants to set up an 8.5G plant.

The new regulations also allow for the equity participation of domestic panel makers in Chinese companies.

AUO is already a licensed panel manufacturer in China, and Chimei is expected to apply for an 8.5G license in the near future.

Chunghwa Picture Tubes, HannStar, and Chimei share prices all rose on Tuesday, and companies can begin submitting applications in one week.