AU Optronics Corp (友達光電), the world's No.3 maker of flat panels for computers and TVs, yesterday announced a restructuring plan aimed at boosting its operational efficiency.
"We believe the organizational restructuring will strengthen AU Optronics' abilities to cope with [increasingly stiff] competition in the future," president Chen Hsuen-bin (陳炫彬) said in a conference call yesterday.
AU Optronics will streamline its major business units from four to two -- computer displays and consumer-electronics displays primarily for liquid-crystal-display (LCD) TVs and mobile phones.
The company will also set up a five-member board of management, led by chairman Lee Kun-yao (李焜耀), which will be in charge of formulating the company's strategies, Chen said.
The restructuring will take effect on Dec. 1, he said.
"AU Optronics' restructuring will allow it to better serve the needs of customers in these two distinctive market segments," Chen said, adding that the company will only invest in products and technologies catering to market demand.
The restructuring announcement was greeted lukewarmly by foreign investors and researchers.
"We need more time to monitor what impact the fine-tuning of the organization will have on AU Optronics' operation," said Wang Wanli (
Eric Lin (林宜正), an analyst with Yuanta Core Pacific Securities (元大京華證券), said he had a "neutral view on the restructuring."
He said he did not expect the change would boost AU Optronics' pricing power, or help it lower costs within the next four quarters.
To survive the highly cyclical industry, LCD panel makers are adopting different strategies to enhance their competitiveness, including buying a TV brand.
Chunghwa Picture Tubes Ltd (中華映管), the nation's third-largest LCD screen maker, chose to join forces with a Chinese LCD vendor, Xiamen Overseas Chinese Electronic Co (廈華電子), to get a bigger share of China's TV market, which is dominated by Chinese brands.
Chunghwa Picture's board gave the go-ahead yesterday to a proposal to purchase as many as a 36-percent stake in the Xiamen Overseas Chinese Electronic, the company said in a statement, without giving details.
Xiamen Overseas Chinese Electronic is the second-largest LCD TV vendor in China with a 7.2 percent of market share last quarter, according to DisplaySearch.
"Chunghwa Picture is eyeing China's potential growth in the LCD TV market, and Xiamen Overseas Chinese Electronic will get a stable LCD panel supply from Chunghwa Picture," said Sophia Tsao (
LCD TV sales in China will jump to 1.2 million units this year, a big proportion of the world's some 23 million units, DisplaySearch said.
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