LCD panel maker AU Optronics Corp (AUO, 友達光電) yesterday unveiled a plan to demerge its higher-margin public information and general purpose displays businesses, marking its first spin-off.
The plan is part of AUO’s structural adjustments to weather the industry’s boom-and-bust cycles and intensive competition. AUO posted a fifth straight loss for last quarter amid sagging demand and overcapacity.
AUO’s board of directors on Wednesday approved a proposal to spin off the two business groups with total assets valued at NT$386.55 million (US$12.91 million) into a new entity called Da Qing Corp (達擎), which would be a wholly owned subsidiary of AUO until the new company’s paid-in capital grows to NT$2 billion.
Photo: Chen Mei-ying, Taipei Times
Da Qing would focus on sales, research and development, and customer service of general purpose and public information displays, AUO said in a statement.
The display products are developed for a wide range of devices ranging from automated teller machines, self-service kiosks, in-flight entertainment and navigation systems, to smart factory industrial PCs and high-precision medical equipment, it said.
AUO said that the public information display products include displays for smart retail, transportation and education, as well as specialized industrial-grade displays for harsh environments, such as outdoors.
Products developed by Da Qing would deliver higher profit margins than commodity-type panels and have longer life cycles, AUO said.
Shareholders are to vote on the demerger at an annual meeting on June 16, and the spin-off is tentatively scheduled for Jan. 1.
AUO said it had earlier hoped to enhance product value through specification diversification and technology upgrades, and separate its businesses into two groups — consumer applications, and commercial and industrial applications.
In March, the company invested NT$3.72 billion to buy a 30 percent stake in industrial computer supplier Adlink Technology Inc (凌華科技).
Rival Innolux Corp (群創) had mapped out similar plans to spin off some businesses 18 months earlier, but the firm has not yet made significant progress.
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