Flat-panel maker AU Optronics Corp (AUO, 友達光電) will maintain an investment plan to build advanced thin-film-transistor LCD facilities in Taiwan, a top economics official said.
Vice Minister of Economic Affairs Hwang Jung-chiou (黃重球) told reporters on Thursday that although AUO is making some adjustments to its NT$400 billion (US$12.44 billion) project, the company would not cut back on its investment and will carry out the project as promised.
Hwang said that since the NT$400 billion investment project was planned by AUO two years ago, the company needs to upgrade the project by making some changes to reflect the current market conditions.
AUO had planned to build 10th-generation and 11th-generation — in technological terms — flat-panel plants in central Taiwan to meet regulatory requirements, as it is seeking to open a 7.5-generation plant in Kunshan, Jiangsu Province, China.
Hwang said AUO now intends to build only 11th-generation plants and to cancel the 10th-generation plants in order to meet market demands. However, he said AUO would not scale back its level of investment.
AUO declined to comment, saying it would remain silent ahead of its second-quarter results announcement, due next week.
However, a company spokeswoman said AUO would continue to invest in Taiwan.
“That won’t change,” she said.
In February, the government relaxed restrictions on China-bound investments for the local high-tech sector, allowing flat-panel makers to establish up to three sixth-generation flat-panel plants in China. In return, these companies have to promise to continue expanding in Taiwan.
In addition, if any local flat-panel producer wants to establish sixth generation — or above — plants in China, the applicant has to operate plants a least one generation ahead in Taiwan.
AUO, which operates an 8.5-generation plant in Taiwan, is the first and only company to file an application with the ministry to invest US$3 billion to build a 7.5-generation plant in China.
A technology committee under the ministry is reviewing AUO’s China investment application.
Hwang said it is reasonable for any company to change its investment plan to reflect the current realities of the fast-changing business environment.
He said that as long as AUO delivers its promised amount of investment, the adjustments in the plan will not have any impact on the review process of its China project.
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