TAIPEI (Reuters) - Prime View International (PVI) , a Taiwanese maker of small display panels, is negotiating to buy a third-generation LCD plant from South Korea's Hydis, a local newspaper reported on Wednesday.

Prime View, which makes flexible displays for electronic books, is looking for new supply sources to meet strong demand, the Chinese-language Economic Daily News said, without citing sources.

Officials at the firms could not immediately be reached for comment.

The report spurred a surge in Prime View's shares to near their daily 7-percent limit in early trade on Wednesday. Taiwan's main TAIEX index fell 0.25 percent.

Prime View and others are developing and producing a new generation of thin electronic displays, or e-paper, that need no added light source to read.

E-paper is already in the market in handheld e-books that allow hundreds of books to be downloaded onto them via the Internet.

Amazon.com , the world's largest Web retailer, said on Monday it will begin selling an electronic book reader "Kindle" with wireless access, the latest attempt to build consumer interest in portable reading devices.

Prime View supplies its displays to Amazon and Sony Corp , which also sells e-books.

(US$1=T$32.3)

(Reporting by Baker Li, Editing by Dominic Whiting)
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