The company will get a loan of about NT$10 billion more than originally planned, said Eddie Chen, a spokesman for Tainan, southwest Taiwan-based Chi Mei, Taiwan’s second-biggest maker of flat-panel displays. He declined to give further details.

Chi Mei, which has the fourth-biggest market share of flat panels, needs to spend money to increase capacity and catch up with rivals AU Optronics Corp., LG Philips LCD Co. and Samsung Electronics Co Ltd. Electronics makers are the biggest borrowers in Taiwan, taking up US$6.4 billion of loans last year.

“In this industry, you have to keep investing every year to keep up with the newer technology to stay competitive,” said Nicholas Teo, an analyst at Macquarie Securities Ltd. in Taipei.

The flat-panel maker will borrow NT$52.5 billion for seven years, according to two bankers with direct knowledge of the deal. The loan pays an interest margin of 57 basis points more than the 90 day primary commercial paper rate, a benchmark for Taiwan loans, said the bankers. A basis point is 0.01 percentage point.

The manufacturer hired 20 banks, including Bank of America Corp., HSBC Holdings Plc, Bank of Taiwan, Chinatrust Commercial Bank and First Commercial Bank to arrange the loan, said the bankers, who declined to be identified before a public announcement.

Chi Mei had 11 percent of the market for LCD panels at the end of 2006, according to DisplaySearch, a technology industry researcher based in Austin, Texas.

Samsung is the biggest producer with a 20 percent market share, followed by LG Philips with about 19 percent, and AU Optronics is third with 16.7 percent, according to Display Search.

Chi Mei has about US$6 billion worth of loans outstanding, according to data compiled by Bloomberg.

The flat-panel maker is also planning to raise about NT$25.6 million by placing as much as 800 shares to finance the new plant, it said in a statement last month. The company will begin mass production at the plant in the fourth quarter of this year, the statement said.

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