Rumors about the Foxconn Group setting up an LCD panel supply chain in Brazil have been in air for some time and the latest market speculations indicate that Foxconn plans to build an 8.5G LCD panel production line in Brazil, employing advanced panel manufacturing technology from Sharp.

Foxconn may also purchase existing production equipment from Sharp or Chimei Innolux (CMI), according to industry sources.

Since Foxconn does not have any expertise running an 8.5G line, the company is expected to assign CMI CEO Hsing-chien Tuan to carry out its investment projects in Brazil, the sources indicated.

Previous rumors indicated that CMI is likely to relocate one of its 5G or 7.5G lines to Brazil, but CMI has not yet submitted an application to the relevant government agencies, said the sources.

Due to concerns about technology, capital, taxation as well as market conditions, Foxconn is unlikely to finalize its investment plans in Brazil until 2012, the sources commented.