Possible sale fails to boost AUO's shares

Shares of AU Optronics Corp (友達光電) failed to respond to news that the company has been holding talks over the possible sale of 19 surface mounting technology (SMT) production lines to Taiwan Surface Mounting Technology Corp (台灣表面黏著科技).

The planned sale of these SMT lines is aimed at achieving more cost-efficient manufacturing at AU Optronics after the firm acquires Quanta Display Inc (廣輝電子) next month, but AU Optronics' shares lost 0.52 percent to NT$47.95 on the Taiwan Stock Exchange yesterday.

The Chinese-language Economic Daily News reported earlier yesterday that AU Optronics, the world's third-biggest maker of liquid-crystal displays (LCD), plans to sell some of Quanta Display's SMT lines to Taiwan Surface.

"We are in ongoing discussions with Taiwan Surface about selling some of Quanta Display's surface mounting technology lines in China," company spokeswoman Hsiao Ya-wen (蕭雅文) said yesterday, confirming the report. "The details -- like how many production lines would be involved and the price -- have yet to be confirmed," she said.

The planned sale of the 19 SMT lines is aimed at focusing AU Optronics' resources on flat-panel manufacturing, Hsiao said.

SMT is a key process in producing printed circuit boards. The 19 Quanta display SMT lines are at a LCD module plant in Shanghai, according to the report.

Taiwan Surface is expected to become the nation's largest SMT supplier once the company buys the lines from AU Optronics, the report said, adding that Taiwan Surface is already a partner of AU Optronics.