Taipei  - Taiwan liquefied crystal display (LCD) makers Chi Mei Optoelectgronics Corp and Innolux Display Corp on Saturday announced plans to merge to increase their global competitiveness.

The deal will be carried out through stock swap.

The new company will be called the Chi Mei Electronics Co Ltd.

Chi Mei is Taiwan's second-largest LCD maker, while Innolux is affiliated with the Hon Hai Precision Industry Co, which is the world's largest contract electronics manufacturer.

Chi Mei founder Hsu Wen-lung said there is great potential for LCD industry. "This merge does not only concern our two companies, but also the future of Taiwan's LCD industry."

Hon Hai founder Terry Kuo said the combined resources would allow the new company to boost output.

Taiwan's Broadcasting Corp of China said the merged firms would expand their presence on the mainland, where rapid economic growth has raised demand for LCD panels used in television, computer and cellular phone screens. (dpa)