AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday said it had signed a memorandum of understanding (MOU) with Toshiba Mobile Display Co to buy a panel plant in Singapore that would enable it to enter the high-end notebook computer and mobile phone businesses.
This is the latest in a string of countermeasures unveiled by the Hsinchu-based flat-panel maker as it competes with Chimei Innolux Corp (奇美電子), allowing AU Optronics to broaden its product portfolio in terms of technologies rather than boosting capacity.
AU Optronics is also seeking to enhance its partnership with TV and PC monitor makers like TPV Technology Ltd (冠捷) to enhance competitiveness.
The company’s board approved a proposal to form a joint TV assembling venture with TPV in Poland, investing a combined US$40 million (US$1.27 million) initially.
Based on the MOU with Toshiba Mobile, AU Optronics would purchase 100 percent of the shares in AFPD Pte Ltd, a subsidiary of Toshiba Mobile Display in Singapore and a leading manufacturer of LCD panels based on low- temperature polysilicon (LTPS) technology.
“AU Optronics’ competence in the high-end display market is further strengthened by AFPD’s fab capacity, talented workforce and technologies,” chief executive Chen Lai-juh (陳來助) said in the joint statement.
“The acquisition could also help place AU Optronics in a special strategic position in slim notebooks and smart phones for high-end markets and new application markets such as tablet PCs,” Chen said.
The companies are scheduled to sign an agreement by the end of this month.
No financial details were disclosed yesterday, though speculation the acquisition might cost AU Optronics ¥10 billion (US$108 million) was dismissed.
“The deal will help AU Optronics obtain [more advanced] LTPS technologies and help it make the ultra-slim screens used in premium laptops and handsets, an area in which Chi Mei Innolux is weak,” said David Hsieh (謝勤益), a vice president of market researcher DisplaySearch.
Toshiba Mobile supplies ultra-slim screens from the Singaporean plant to laptop computer makers including the world’s No. 3 PC maker Dell Inc, Sony Corp and Lenovo Group, Hsieh said.
The plant ships 1 million notebook panels a month mostly tailor-made, he said.
After the transaction, AU Optronics may own the factory utilities, equipment, workforce and patents.
Toshiba Mobile is also planning to continue using the capacity for its customers, AU Optronics spokesperson Hsiao Ya-wen (蕭雅文) said by phone.
AFPD’s G4.5 fab — the latest generation fab capable of producing LTPS — has a capacity of approximately 45,000 sheets per month, the statement said.
AU Optronics currently operates a 3.5G LTPS plant in Taiwan.
The acquisition of AFPD in Singapore adds a new manufacturing base in Asia to AU Optronics’ existing units in Taiwan and China.
The new site would hopefully be able to serve high-end display markets in South Asia, the Middle East, Australia and New Zealand, the statement said.
The share price of AU Optronics rose 0.28 percent to NT$36.1, out-performing the TAIEX, which dropped 0.53 percent yesterday. Chi Mei Innolux shares fell 1.42 percent to NT$48.45.
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