Taiwan-based flat screen manufacturer AU Optronics (2409.TW, AUO.NYSE) said it plans to build a US$3 billion "7.5 generation" liquid crystal display (LCD) plant in Kunshan, Jiangsu province, AFP reported. The announcement follows a decision by Taiwan’s government to relax restrictions on investment in flat screen and microchip technology on the mainland. However, Taiwan-based firms are limited to producing lower-end flat screens in China. Optronics plans to begin production of LCDs larger than 40 inches in 2011, and is targeting the mainland market. Its 8.5 generation plant in Taiwan produces 50-inch panels. Taiwan firms have been calling for easing controls on investment in the mainland, citing Japanese and South Korean competition there.