AU Optronics, the world's third-largest flat panel maker, said Friday it plans to make inroads into northern China by setting up a joint venture with a Chinese home appliance giant. AU Optronics said it has agreed with Haier Group, the largest home appliance company in China, to establish a liquid crystal display (LCD) TV panel assembly plant in Qingdao, Shandong province. The joint venture will cost US$7 million (NT$221.7 million), with Haier paying 70 percent and AU Optronics 30 percent. 'Haier is one of AU Optronics' important customers in China, ' said Hsiao Ya- wen, a company spokeswoman. 'The joint venture is a strategic alliance that will allow AU Optronics to get closer to our customer,' Hsiao said. Currently, AU Optronics runs LCD panel assembly plants in eastern, southern and western China. Hsiao said the company expects the Qingdao plant will begin operation in the second half of this year. China's Xinhua News Agency cited Haier as saying it expects to take advantage of AU Optronics' cutting edge production technology to provide high quality TVs to its global customers. Haier produces 15 million TVs a year and sells its products to more than 80 countries in the world, Xinhua reported. 