AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, has filed an application with the Ministry of Economic Affairs to buy a stake in China-based Longfei Optoelectronics Co (龍飛光電), the ministry said yesterday.
According to the ministry, AUO formally sought approval from the ministry’s Investment Commission two days earlier to acquire a share of Longfei in Kunshan, Jiangsu Province, for US$796 million.
AUO is the first local company to seek to become a shareholder in a Chinese counterpart after the government relaxed China-bound investment rules in March to allow local flat-screen and -semiconductor manufacturers to acquire stakes in Chinese companies amid closer cross-strait economic ties.
The ministry said AUO is not expected to secure a majority stake in Longfei through the investment, but will still be able to have a say in the management of the company.
However, the ministry declined to disclose the size of the stake AUO is eyeing.
An advanced 8.5G plant in Longfei making large panels for TV use is scheduled to start operations at the end of next year.
Market observers said the Chinese stake is expected to result in great savings for AUO, which is eager to operate flat-panel production facilities in China to enhance its global competitiveness, as there will be no need for the Taiwanese firm to spend the more than NT$100 billion (US$3.48 billion) required to set up an 8.5G plant on its own.
As a result, AUO has simultaneously applied to the ministry to withdraw an investment plan for building a flat-panel plant in Kunshan, the ministry said. The government approved the Kunshan investment plan in December last year.
The observers said the company’s move to acquire the Longfei stake instead of establishing its own production facilities is expected to reduce pressure on its financial condition, particularly after the company posted a net loss of NT$13.9 billion in the first quarter on falling TV panel prices.
The ministry said it would evaluate the AUO investment plan as soon as possible.
Separately, AUO yesterday posted a preliminary consolidated revenue of NT$33.17 billion for last month, down 7.7 percent month-on-month and 19.4 percent year-on-year.
Last month, the company’s shipments of large panels used in desktop monitors, notebook PCs and LCD TVs numbered about 9.98 million units, a decrease of 6.8 percent from the previous month, AUO said in a statement.
Shipments of small and -medium-sized panels dropped 15.9 percent month-on-month to about 14.11 million units, the company said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to