AU Optronics Corp (AUO, 友達光電) chairman Lee Kun-yao (李焜耀) yesterday said the LCD panel maker would be able to withstand the industrial slump, and instead urged the government to offer financial support to local rivals to prevent economic troubles from spreading to other firms in the supply chain.
Lee made the remarks after a closed-door meeting with Council for Economic Planning and Development Minister Christina Liu (劉憶如), who was trying to persuade AUO, the nation’s No. 2 LCD company, to start consolidation talks with bigger rival Chimei Innolux Corp (奇美電子).
“The company is able to weather this winter because of our competitiveness in technologies, talented employees and operations,” Lee told a media briefing after the meeting in Taichung.
Liu also met high-ranking executives from Chimei Innolux, including company chairman Frank Liao (廖錦祥), in Taipei yesterday.
Chimei and AUO were open to industrial integration and would accept any plans that would benefit their companies and the industry, Liu said.
Local LCD panel makers should cooperate and integrate to create synergy in capacity, technology and marketing, strengthening their global competitiveness, Liu said.
STAGNANT DEMAND
Downplaying stagnant demand for TVs and PCs, Lee said demand for large-sized flat panels would not be a problem because most PC makers, except Samsung Electronics Co, do not own panel factories.
In addition, Japanese companies are withdrawing from the large-sized flat-panel sector, presenting an opportunity to Taiwanese -flat-panel makers to supply panels to Japanese brands, he said.
However, Lee said the government should offer support as soon as possible to local rivals to stabilize the industry’s supply chain.
“We hope the government can accelerate its pace in helping solve the financial problems faced by other companies in the sector,” Lee said.
JAPAN EXPERIENCE
To save Japan’s LCD sector, the Japanese government has poured about US$6.6 billion into a consolidation program in Japan’s small and medium-sized flat-panel industry, which Lee said the government could emulate when it lends help to the LCD industry.
Lee added that the government should formulate a concrete policy for the LCD industry.
Liu, who is in charge of the National Development Fund (國發基金), said part of the fund was likely to be invested in the nation’s star industries, including LCD makers.
There is NT$20 billion (US$660 million) left in the fund, which started out with NT$200 billion.
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