The chairman of AU Optronics Corp (友達光電), the nation's largest maker of TFT-LCD panels for flat computer displays, vowed yesterday to beat upstart Quanta Display Inc (廣輝電子) in a race to build an advanced production facility.
The stakes are high. The new plants, dubbed fifth generation facilities, will reduce per unit prices on LCD panels, making companies more competitive.
Current fourth generation plants produce large sheets of glass from which as many as six 15-inch LCD panels -- standard-size for computer displays -- may be cut. But the advanced plants are capable of producing far larger sheets of glass, which can be cut into 12 to 15 standard-sized computer screens.
The new plants will also enable companies to compete better in the market for 17-inch and larger flat panel screens for computers and televisions.
Quanta Display, a company set up by the nation's largest notebook computer maker, Quanta Computer Inc (廣達電腦), said last week it would spend US$1 billion to become the first company in Taiwan producing TFT-LCD panels in a fifth generation plant. The company's chairman, Barry Lam (林百里), said it would begin mass production in April 2003.
Notebook computers currently use 14.1-inch TFT-LCD panels, while larger 15-inch screens are becoming more popular.
AU Optronics was the first company in Taiwan to ramp production on a fourth generation plant and it will be the first to do so on a fifth generation plant as well, a Chinese-language newspaper quoted Chairman Lee Kun-yao (李焜耀) as saying yesterday. Lee said AU Optronics plans to spend more than NT$20 billion in the first phase of construction on its proposed plant. The company hopes to use the new plant to produce more large size screens, up to 27 inches for LCD televisions.
The report said AU Optronics has already placed an order for equipment for the fifth generation plant. Lee also refuted analyst reports that the average selling price of TFT-LCD panels has started to fall. He said that although it is up to the market to decide TFT-LCD panel prices, panels made for notebook computers are still being bid higher.
Analysts fear the yearly second quarter lull will take the steam out of the computer industry, thus impacting downstream industries such as TFT-LCD panels.
AU Optronics is the third largest producer of TFT-LCD panels in the world. The company said April sales tripled, surging to NT$7.5 billion from NT$2.5 billion during the same period a year ago.
More and more consumers are choosing to buy new computers with flat panel displays instead of traditional CRT monitors, which take up far more desk space.
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