Matsushita Electric Industrial Co. and Toshiba Corp. said Friday they will set up a joint venture in Singapore next month to manufacture low-temperature polysilicon liquid crystal display panels used in video mobile phones and other digital appliances.

The new company will be based in Tampines and will be initially capitalized at 50 billion yen, with Toshiba contributing 67 percent and Matsushita 33 percent, according to a statement released by the two major electronics manufacturers.

Production will start in July 2002, with an overall capital investment of 123 billion yen to raise monthly output capacity to 55,000 glass substrates by fiscal 2003.

The firms claim that this will be the highest output of any polysilicon LCD facility in the world. The joint venture will employ 750 people at its plant, the two firms said.

"This is a collaboration of industry leaders that will promote polysilicon TFTs (thin-film transistors) as the display of choice in next-generation products," Toshiba President Tadashi Okamura said.

Said Matsushita President Kunio Nakamura: "I hope the combination of Toshiba's advanced low-temperature polysilicon LCD technology and our fast-response LCD driving technology will bring more advanced and cost-competitive solutions to our customers in the global market."

Low-temperature polysilicon LCDs offer higher image quality with a low number of external components and connections, according to Toshiba and Matsushita. They also feature the lightness and resilience required for small mobile devices, the firms said.

According to one account, the market for high-resolution LCDs is expected to top 4 trillion yen in 2004, up from 2.5 trillion yen in 2001. This expected surge is due to growing demand from manufacturers of video-capable mobile phones, personal digital assistants, portable personal computers and other digital appliances.

Toshiba and Matsushita said they have chosen Singapore as their joint venture site because of its excellent infrastructure as well the proliferation of skilled workers and strong supporting industries.