LG Display, one of Korea’s leading display manufacturers, said Wednesday it has signed a deal with the city government of Hai Phong, the third-largest city in Vietnam, to build a display module factory there.

The Korean display firm will first spend $100 million to establish a local office in the city and begin construction of the factory later this year. It will start operating the factory next year.

LG Display currently runs manufacturing factories for display modules in Paju and Gumi in Korea; Guangzhou, Nanjing and Yentai in China; and Wroclaw in Poland.

The plan to build the new manufacturing facility in Vietnam aims to expand the firm’s future display businesses, including its organic light-emitting diode, according to the LG Group affiliate.

“Vietnam’s business environment is favorable toward foreign investment and will help improve LG Display’s competitiveness in production,” said LG Display chief production officer Jeong Cheol-dong.

The LG Display CPO met with the Vietnamese city’s top officials including chief secretary Le Van Thanh at the signing ceremony of the memorandum of understanding held earlier this week.

Le Van Thanh has pledged to provide full administrative and institutional support for LG Display’s project, the company said.

By Kim Young-won (wone0102@heraldcorp.com)