The boards of Acer Display and Unipac Optoelectronics Corp (聯友光電), have approved a plan to merge the two thin film transistor-liquid crystal display (TFT-LCD) screen producers, announced Stan Shih (施振榮), chief executive officer of Acer Inc (宏電), yesterday at a press conference in Taipei.
Acer Display Technology, Taiwan's second-largest flat-panel display maker, is an affiliate of computer maker Acer Inc, while its rival Unipac is an affiliate of semiconductor foundry giant United Microelectronics Corp (UMC, 聯電).
The merged entity -- named AU Optronics (
PHOTO: HAKU HUANG, TAIPEI TIMES
"The merger will be completed via a share swap on a 1-for-1.17 basis," Shih said, hinting one Acer Display shares will be traded for 1.17 to Unipac shares.
"The new entity is expected to produce 170,000 TFT-LCD units per month -- which will account for 12.5 percent of the world demand and become the world's second-largest supplier after Samsung Electronics Co (
A display screen made with thin film technology is a liquid crystal display, common in notebook and laptop computers.
Currently, Samsung's annual TFT-LCD output makes up about 14.2 percent of the world demand while supplies by LG-Philips is less than 12 percent, Tsao said.
"The competition is very fierce in this line of business as there are 24 TFT-LCD display makers already operational in Korea, Japan and Taiwan today," said Tsao. "I think, in the short term, some of them may need to cut costs while others may have to [form] collaborations to make them profitable... but, I believe there will be less than five companies that gradually become dominant in this industry over the long run," he added.
The final merged entity is predicting annual operational sales will reach NT$40 billion this year and top NT$100 billion within the next three years, said Lee Kun-yao (
One industrial analyst -- while surprised at the announcement -- was upbeat about the news, saying the merger will give both sides more economy of scale and help build market share, in addition to wooing fresh foreign investment capital.
Moreover, "The merger is likely to kick off other potential mergers in this industry in the foreseeable future," said Charles Yang (
Yang also praised the merger as the two partners complement each other. "Unipac is mainly focused on small-sized TFT-LCD units such as 13-inch and 14-inch screens while Acer Display produces mostly large-sized [17-inch] units."
"After the merger, the new entity will have a full range of products equivalent to Sharp of Japan," said the company's new chairman Lee.
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