AU Optronics Corp (AUO, 友達光電), the world’s third-largest liquid-crystal-display (LCD) panel maker, intends to spend NT$400 billion (US$12.12 billion) to build four next-generation plants to make TV panels beginning late next year, a government official said yesterday.
AU Optronics has submitted a proposal to lease 200 hectares of newly developed land in Erlin Township (二林), Changhua County, where it plans to build tenth-generation (10G) plants, Yang Wen-ke (楊文科), director-general of Central Taiwan Science Park Administration, told reporters.
“Because of the economic slump, AU Optronics has put off the construction plan to the end of 2010, from this year as originally scheduled,” Yang said, adding that the panel maker’s capacity expansion would match market demand.
Under the plan, each next-generation plant, which will have a monthly capacity of 60,000 sheets and will cost NT$100 billion, Yang said.
Earlier this year, Japan’s Sharp Corp and Sony Corp announced they would co-build the world’s first 10G production line
On July 23, AU Optronics told investors it planned to increase capital spending this year to as much as NT$75 billion from NT$60 billion to expand capacity including resuming construction of a second 8.5-generation production line on the back of recovering demand for TVs.
The new G8.5 production line is expected to begin operation by the end of next year, the company said. The production line will crank out primarily 46-inch, 52-inch or 55-inch TV panels.
However, the construction of new G10 plants is uncertain. The government has not approved the Erlin development project because of environmental disputes, Yang said.
Unsatisfied with a compromise solution made from the administration, farmers in Yunlin County, which is adjacent to Erlin, have protested against the project as they worry about water pollution and fear that the factories will deplete water resources that have long been used for planting rice and fishing, Yang said.
“If we cannot settle the environmental disputes by the end of the year, we fear the construction projects for local companies including AU Optronics’ will be put off,” Yang said.
About 10 other companies primarily semiconductor companies including Winbond Electronics Corp (華邦電子) have expressed their interest in building new plants in Erlin, Yang said.
Separately, the National Science Council (NSC) yesterday said that the number of employees forced to take unpaid leave fell sharply to about 14,697 workers by the middle of the month, compared with about 120,000 in November of last year, citing the statistics from the nation’s three science parks.
The NSC said that factory utilization at local companies was rising as economic recovery had helped drive demand for products made by Taiwanese manufacturers.
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