AU Optronics Corp (友達光電), the world's third-largest maker of liquid-crystal-display panels, yesterday said it signed an agreement with Korean rival Samsung Electronics Co to share patents for flat-panel manufacturing technologies in a bid to strengthen competitiveness.
Under the agreement, the two companies would share licenses including patents in the area of thin-film-transistor-liquid-crystal-displays (TFT-LCD) and organic light-emitting diodes (OLED), especially concerning the technology for LCD TV applications, AU Optronics said in a statement released yesterday.
"AU Optronics and Samsung expect the agreement to bolster the development and deployment of TFT-LCD technology in LCD TVs, providing a new catalyst to strengthen the competitiveness of both companies," they said in the statement.
AU Optronics declined to reveal the value of the transaction and the number of patents involved. The deal takes effect immediately.
TFT-LCD technology is now the most widely used technology among a wide range of flat panel manufacturing technologies for consumer electronics, while OLED technology is mostly used in making smaller-sized screens, such as 2 inch ones, panels for mobile phones and digital music players.
Samsung is the world's biggest OLED panel maker with 26.4 percent market share in terms of shipments as of the third quarter of last year, according to market researcher DisplaySearch. The company is also the world's No.2 maker of TFT-LCD panels.
AU Optronics postponed the mass production of its own OLED panels for mobile phones to the first quarter, according to the research house.
"It is rare for OLED panel makers to share patents. The patent sharing agreement is quite a positive sign for the industry," said DisplaySearch analyst Jane Hsu (徐玉娟).
As OLED panel makers made much greater efforts than TFT-LCD makers in building up intellectual property rights, it would not be easy for manufacturers to avoid patent infringement, Hsu said.
AU Optronics said it now owns over 1,700 patents worldwide, with over 3,300 patents pending.
To extend its patent coverage, AU Optronics purchased 170 patents related to TFT-LCD manufacturing technology from International Business Machines Corp of the US last year.
The company is not alone in moving to strengthen its intellectual property position amid strong competition. Rival Chi Mei Optoelectronics Corp (奇美電子) also said it signed contracts with Japan's Hitachi Display Ltd on cross-authorization of some 1,000 LCD patents in June.