AU unveils newer, smaller panels

AU Optronics Corp (友達光電), the world's No.3 supplier of flat-screen panels, yesterday unveiled new displays for handheld devices and entertainment gadgets as part of its efforts to broaden its product portfolio to cope with fickle industrial cycles.

In addition to new 32-inch and 37-inch flat screens for televisions, the Hsinchu-based company also showcased flat panels for mobile phones, personal digital assistants, game consoles and MP3 players at the annual FPD Taiwan (flat-panel display) trade show in Taipei.

"Among those, [shipments of] handset panels will rise rapidly," AU chairman Lee Kun-yao (李焜耀) told reporters while touring the company's booth at the Taipei World Trade Center Exhibition Hall.

Shipments of medium- and small-sized screens grew 10.3 percent to 2.4 million units last month from April, according to the company.

"I think that will help AU enhance its profitability as these customer-made products have a higher gross margin than computers," said Alex Wu (吳興國), an analyst tracking the flat-display industry for KGI Securities (中信證券).

Wu estimated middle- and small-sized panels made up around 10 percent to 15 percent of AU's total sales, compared to local peer Chi Mei Optoelectronics Corp's (奇美電子) 5 percent.

In late April, AU told investors it expected to manufacture 36 million medium and small-sized screens this year and 19 million big-sized panels for computers and televisions.

Smaller rival Chunghwa Pictures Tubes Ltd (中華映管), the nation's third-largest flat-panel maker, also showcased its first 1.5-inch displays for cellular phones and 7-inch displays for cars and other special applications, as the company expands into the lucrative middle- and small-sized panels.

AU dominant

Chunghwa Picture, which focuses on making 15-inch panels for laptop computers, expects to start pilot production of the new models in August.

Even so, Wu said AU will remain the leading manufacturer of small displays for a long time despite the emergence of a number of smaller competitors.

Toppoly Optoelectronics Corp (統寶光電), an LCD manufacturing affiliate of Compal Electronics Inc (仁寶), and Prime View International Co (元太科技) produce flat panels for DVD players and car displays. But their capacities lagged far behind AU's, Wu said.

Money-losing Toppoly expects to produce 60,000 units per month, executive vice president Wu I-wei (吳逸蔚) said.

Separately, Chunghwa Picture also plans to enter the rear-projection TV market by showcasing its first model using liquid crystal on silicone technology during the trade show.

But chairman Frank Lin (林鎮弘) said he could not be certain about the launch date because of a lack of chips.

Commenting on Chunghwa Picture's move, Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券), said: "I don't see much potential for the business as the technology is still in its nascent stage."