Flat-screen maker LG.Philips LCD has entered a preliminary agreement to build a new LCD module plant in Guangzhou, China, betting on the world's growing appetite for sleek televisions.

"In May 2006, we entered into an investment agreement with the Guangzhou Development District Administrative Committee to construct a module production plant in Guangzhou," the company said in a disclosure it filed to the New York Stock Exchange earlier this week.

LG.Philips, the world's biggest maker of large-sized LCD in 2005, did not specify the size of the investment or the timing for the new China plant.

Analysts have been forecasting makers of liquid crystal display (LCD) makers to post poor earnings in the second quarter amid continued drops in prices for flat screen panels, heightened competition and rising inventories.

Earlier this month, LG.Philips, which competes with domestic rival Samsung Electronics Co. Ltd. and Taiwan's AU Optronics Corp., halved its earnings before interest, tax, depreciation and amortisation (EBITDA) margin forecast for the second quarter while cutting panel price and shipment growth forecast.

The Guangzhou plant will become the firm's third overseas module production plant. It is currently expanding its existing module plant in Nanjing, China and broke ground on the new module plant in Wroclaw, Poland, in June.