(Yicai Global) Aug. 29 -- Tianma Microelectronics plans to raise as much as CNY7.3 billion (USD1 billion) in a private share placement in order to ease the financial pressure of building a new production line for active-matrix organic light-emitting diodes.

The Shenzhen-based firm expects to sell stock to 10 investors, including the government-owned Yangtze River Tianma Investment Fund, it said in a statement yesterday, adding that the cash will help it use its capital more efficiently.

Tianma Microelectronics unveiled plans to build the CNY14.5 billion second phase of its Wuhan factory in June 2018, predicting construction would take 25 months. The facility's maximum capacity will be 37,500 AMOLED display panels a month, designed for smartphones, tablets, in-car displays and industrial control screens.

The company predicts the new production line could generate CNY17.2 billion in revenue each year, with profit coming in at about CNY2.2 billion.

AMOLED products made up 40 percent of small- and medium-sized display sales in China last year, despite only accounting for 17 percent of shipments, according to industry data. By 2022, they are forecast to make up 27 percent of shipments but some 58 percent of sales, with major growth coming from smartphone sales.

Tianma's plans follow on from an Aug. 12 deal it penned to invest CNY48 billion in eastern China's Xiamen to build another sixth-generation AMOLED facility. This plant, expected to complete in two and a half years, will produce 48,000 sheets of 1,500 millimeter by 1,850 millimeter flexible display substrates a month.

Editor: James Boynton