AMSTERDAM, The Netherlands, May 18 -- Royal Philips Electronics announced that it has signed a letter of intent with LG Electronics of Korea under which Philips will acquire a 50 percent share in LG LCD, LG Electronics' Active Matrix Liquid Crystal Display business (AMLCD). Philips' investment is valued at approximately $1.6 billion (US).The new company will begin as a manufacturing and technology joint venture, with LG LCD and Philips holding equal management rights; it will have the potential to develop over time into a full joint venture incorporating all the AMLCD activities of both parent companies. Under the terms of the agreement with Philips, LG LCD will expand production capacity at two of its three production facilities in Kumi, Korea. The third Kumi facility will begin manufacturing 680 x 880 mm mother glass, which will be the largest size available on the market.