AU Optronics

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Incorporated: 2001
NAIC: 334419 Other Electronic Component Manufacturing

AU Optronics Corporation is Taiwan's largest producer of flat panel displays--that is, thin film transistor liquid crystal display panels, or TFT-LCDs--and is also the world's number three manufacturer, trailing only South Korea's Samsung and LG-Philips. As the first Taiwanese company to begin producing active matrix LCDs in the early 1990s, AU Optronics has played a leading role in Taiwan's transformation as one of the world's high-technology centers. The company has expanded its production from small-sized panels to the latest-generation large-scale panels, such as Taiwan's first high-definition 46-inch television panel, debuted in late 2003. AU Optronics also has developed a strong in-house research and development component, which has enabled it to become the first in the world to produce an amorphous silicon-based TFT OLED (organic light-emitting display). The company expects to put this technology into practice producing panels for new generation mobile telephones--including those produced by sister company BenQ, Taiwan's leading mobile phone producer. AU Optronics operates subsidiaries in Taiwan, Japan, China, the United States, and The Netherlands, with production based in Taiwan and in Suzhou, China. In 2003, AU Optronics posted revenues of more than TWD 104 billion ($3.1 billion), multiplying its sales by more than 18 times since 1999. The company is led by Chairman K.Y. Lee, who is also chairman of BenQ Corporation.

Taiwan began an effort to shift its economy from a reliance on low-margin mass production items to the higher-margin and higher-prestige markets such as the technology sector in the early 1980s. As part of that effort, the government established the Industrial Technology Research Institute (ITRI), attached to the Ministry of Economic Affairs. By the late 1970s, the ITRI had targeted the integrated circuit market for growth, and established a new division, the Electronic Research Service Organization (ERSO), which began acquiring the technology--through technology transfers with Western partners such as RCA--for the creation of Taiwan's own integrated circuit (IC) production industry.

With RCA's assistance, ERSO successfully launched Taiwan's first IC production facility. In 1980, the government body spun off the IC line into a new company, United Microelectronics Corporation (UMC). UMC at first turned out small chips for the consumer market, such as for use in digital wristwatches. Through the decade, however, UMC continued to develop its technology--and the sophistication of its production capacity. Commodity production remained, however, a major part of the company's business.

In 1985, UMC became the first of Taiwan's IC producers to go public, listing on the Taiwan Stock Exchange. The listing enabled the company to begin pursuing a diversification into other emerging technologies. One of these was the small but potentially vast market for liquid crystal display (LCD) panels. UMC's interest turned toward the development of thin-film transistor (TFT) technology, and in 1990 the company backed the founding of a new company dedicated to the development of TFT-LCD technology, called Unipac Optoelectronics. UMC was to remain a major Unipac shareholder throughout the decade.

Turning once again to foreign partners in a series of technology transfer agreements, Unipac set out to build its own first-generation production plant, known as Fab L1 within the company, at the newly built HsinChu Science-based Industrial Park. That facility began testing in the early 1990s, and by 1994 had launched full-scale production.

Unipac's initial production was limited to a range of sizes between 1.8 inches and 4-inch screen formats, but by 1995 the company had ramped up to production on the 5.6-inch format as well. By then, the company was able to produce some 30,000 four-inch screens per month. The smaller formats were geared, in large part, to such end uses as navigation displays and television monitors, and also found a market later in the decade as passenger airline seatback displays.

Portable computers, however, represented the most buoyant market for TFT-LCD technology. At the middle of the decade, the 10.5-inch form factor became the industry standard. Yet, Unipac, like other emerging Taiwanese LCD manufacturers, continued to lag behind its larger competitors in Japan and Korea, while depending on technology brought in from these countries and elsewhere. At the same time, Unipac faced impending pressure from a number of new competitors, which were ramping up to production of their own large-size panels in the latter half of the 1990s.

One of the new companies was Acer Display Technologies (ADT), which was founded as a subsidiary of the fast-growing computer group in 1996. ADT's ambitions took a big step forward in 1998, when the company signed a technology transfer agreement with IBM. Not to be outdone, Unipac reached its own technology transfer agreement that year with Japan's Matsushita. Both agreements promised to boost Taiwan's capacity for producing large-sized TFT-LCD panels.

The agreement with Matsushita enabled Unipac to complete its second-generation fab, which began mass production in 1999. The company's entry into the large-sized panels market launched its transformation. From sales of just $20 million in 1998, Unipac entered a period of explosive growth. By the end of 1999, the company's revenues topped $70 million.

By March 2000, Unipac launched its first 17-inch TFT-LCD, becoming the first in Taiwan to produce in the larger than 15-inch category. The company followed that triumph with a listing on the Taiwan Stock Exchange, ultimately reducing UMC's stake in Unipac to just 40 percent. Soon after Unipac's public offering, it was joined on the stock exchange by ADT, also making its stock market debut. By the end of 2000, Unipac had launched mass production in its newest Generation 3.5 facility, FAB L3m, capable of producing 60,000 sheets per month. In the meantime, Unipac continued producing its original small-sized screens, capturing the world's number two position in that market, behind leader Sharp of Japan.

UMC had in the meantime been structuring its operations, shedding its commodity ICs business to refocus itself as a pure-play semiconductor foundry. As part of that effort, UMC sought a means to spin off its LCD business. In 2001, Unipac found a new partner when Acer agreed to spin off its own display panels subsidiary ADT into a new, merged company together with Unipac, called AU Optronics. The chairman's seat at the new company was taken by K.Y. Lee, who also served as chairman at another Acer offshoot, BenQ Corporation.

AU Optronics' combined production capacity--which included two LCD facilities from ADT--placed it among the global industry's leaders, and also gave it the top position in the domestic market. The company's combined clout encouraged it to launch an effort to gain greater control of its technology requirement. In 2000, AU Optronics opened its research and development facility in Hsinchu. As the company's executive vice-president, Lu Po-Yen told EBN: "The research and development of various types of new products has become the key for us to surpass our current high position and quicken the pace of our ascension to the world's no. 1 flat-panel-display company."

As part of that effort, the company pledged to spend some $300 million leading up to 2005, doubling its previous research spending. The effort began to pay off toward the end of 2002, when the company displayed its first fifth-generation LCD panel. By then, the company also had finished development on the world's first amorphous silicon-based organic light-emitted display (OLED). The company formally debuted the completed product, a four-inch screen, in 2003.

By the end of 2002, AU Optronics' research and development push began paying off for the company--in that year, AU Optronics led the market in filing for new patents, with 265 patent rights applications. AU Optronics also had been stepping up its production, including the June 2002 launch of a new fab in Suzhou, on the Chinese mainland, with a production capacity of 50,000 LCD modules per month.

By 2003, AU Optronics was able to claim the number three position worldwide in shipments of large-sized TFT-LCD panels, as the market for computer peripherals and especially for new LCD-based televisions began to take off worldwide. In August of that year, the company launched production of the world's first 30-inch wide LCD television panel. This was followed soon after by the debut of the first Taiwan-built 46-inch HDTV LCD panel. At the other end of the scale, AU Optronics began targeting the mobile phone market, launching production of its own low-power screens. The company also sought to gain a foothold in the palm-sized market, debuting Taiwan's first two-inch transreflective LCD screen in October 2003. By the end of that year, the company's annual sales had soared past TWD 104 billion ($3.1 billion).

As it entered 2004, AU Optronics had launched construction of a new sixth-generation LCD fab, slated for completion in 2005. The company also began plans for a new seventh-generation fab, originally scheduled to enter mass production in 2007. However, poor market conditions--a drop-off in demand in late 2004 combined with the rapidly falling prices of LCD-based televisions and computer monitors--forced AU Optronics to consider placing the opening of the new facility on hold. Nonetheless, AU Optronics seemed on course to achieve its goal of becoming the world's leading maker of TFT-LCD screens by the middle of the decade.

Principal Subsidiaries

AU Optronics (Suzhou) Corporation (China); AU Optronics Corporation America; AU Optronics Corporation Japan; AU Optronics Europe B.V. (Netherlands); AU Optronics Korea.

Principal Competitors

Samsung Corporation; LG-Philips; Sharp Corporation.

Further Reading

"Acer Display Tech and Unipac to Merge," Futures World News, May 17, 2001.

"AU Optronics," Euroweek, June 4, 2004, p. 21.

"AU Optronics Readies for 2003 Rollout of LTPS Cell Phone Displays," Taiwan Economic News, October 25, 2002.

"AU Optronics' 6th Generation TFT-LCD," Taiwan Economic News, September 17, 2003.

"AUO Ties Up with Changhong for TFT-LCD Market," SinoCast China IT Watch, October 14, 2003.

Hung, Faith, "Au Optronics Establishes Display Technology Center," EBN, November 11, 2002, p. 4.

"TFT-LCD Panel Makers to Invest in New Generation Plants," Taiwan Economic News, April 23, 2003.

Wang, Lisa, "Poor Demand Prompts AU Optronics to Delay Plans to Set Up a New Facility," Tapei Times, September 15, 2004, p. 10.

— M.L. Cohen

AU Optronics Corporation

Type	Public (NYSE: AUO)
Industry	Electronics
Founded	December 2001
Headquarters	Hsinchu, Taiwan
Key people	Kuen-Yao Lee
Revenue	$16 billion USD (2010)
Employees	43,500
Parent	BenQ
Website	http://auo.com

AU Optronics (AUO) was formed in December 2001 by the merger of Acer Display Technology (the former of AUO, established in 1996) and Unipac Optoelectronics Corporation by BenQ Electronics. In October 2006, AUO merged with Quanta Display Inc. to create a leading TFT LCD manufacturer. Additionally, the production of the company's G6 operation reached #1 worldwide. AUO manufactures TFT panels for companies like Samsung, LG, Dell, Apple, Viewsonic, Acer, etc.

Contents 1 History 2 Products 3 Notes 4 Awards 5 External links

History

AU Optronics (AUO) is the first manufacturer in Taiwan to mass produce TFT-LCD panels by means of G3.5, G4, G5, G6,G7.5 and G8.5 fabrications, and the G8.5 fab entered mass production in June 2009. As one of the leading TFT-LCD manufacturers, AUO is a technology innovator with strong emphasis on research and development on display technologies. Since 2002, AUO has been the leader in patent applications among Taiwan's flat panel industry. AUO extended its market to the green energy industry in late 2008, and formally founded its Solar Photovoltaic Business Unit in October 2009.

The company is also planning on building a 7.5-generation LCD generation plant in Kunshan, China in an effort to set up production bases in China,^[1] and received government approval from Taiwan on December 17, 2010.^[2] Restrictions on investment in China were lifted in February 2010, as long as more advanced technologies are produced at home (such as AUO's 8.5-generation plant in Taichung).^[2]

In December 2010, the EU fined AU Optronics for its part in an LCD price fixing scheme, ordering the company to pay a €116.8 million fine.^[3] Other companies fined included LG Display, Chimei Innolux Corporation, Chunghwa Picture Tubes Limited, and HannStar Display Corporation.^[4] The company has stated that it will appeal the fine, but does not expect the decision to affect its operations.^[5]

In 2010, the company built two more manufacturing facilities in the Czech Republic and Slovakia. It also formed joined ventures with TPV Technology, Ltd. based in Hong Kong. In 2011, AU Optronics announced plans to recruit 3,000 employees for its solar technology and display businesses.^[6] Following the earthquake in Japan on March 11, 2011, the company suspended production at its Japanese solar wafer unit, M. Setek Co., to assess potential quake damage.^[7]

In June 2011, two of the company's factories (a 8.5-generation factory at the Central Taiwan Science Park and a TV module plant in Suzhou) became the first factories in the world to obtain ISO 50001 certification.^[8]

Products

AUO provides a full range of panel sizes ranging from 1.2 inches (30 mm) to greater than 65 inches (1,700 mm). AUO generated US$14.8 billion in sales revenue in 2007 and now employs 43,000 throughout its global operations in Taiwan, the United States, the Netherlands, Japan, South Korea, Singapore, and China. Additionally, AUO was the first pure TFT-LCD manufacturer to be listed on the New York Stock Exchange.

According to the Taipei Times, AU Optronics won a "gold" award for having a green factory. One of four factories in the world to comply with the LEED gold standard, the 8.5 generation facility boasts a water recycling rate of 90%, equal to 3 million tonnes of tap water a year. They have wind-powered generators built into ventilation shafts, and they have stated that they are willing to share this technology with other green-minded factories. They hope to become carbon-neutral next year.^[9] In addition, the company aims to recruit hundreds of employees from overseas to work on green technologies.^[10]

Notes

1. ^ Standing, Jonathan (2010-12-11). "Taiwan to OK AU Optronics China plant late Dec-report". Reuters. http://www.reuters.com/article/idUSTOE6BB00120101212. Retrieved 2010-12-12. 
2. ^ ^{a b} Ong, Janet; Lin, Adela (2010-12-17). "AU to Build $3 Billion LCD Factory in China, Taiwan's First, as Ties Warm". Bloomberg. http://www.bloomberg.com/news/2010-12-17/taiwan-approves-au-optronics-s-application-to-build-lcd-factory-in-china.html. Retrieved 2010-12-17. 
3. ^ Aoife White (2010-12-08). "LCD-Panel Makers Fined $649 Million by European Union for Price Fixing". Bloomberg. http://www.bloomberg.com/news/2010-12-08/six-lcd-panel-makers-fined-649-million-by-european-union-for-price-fixing.html. Retrieved 2010-12-11. 
4. ^ Joaquín Almunia Vice President of the European Commission responsible for Competition Policy Press conference on LCD cartel, Visa and French chemists' association decisions Press conference Brussels, 8 December 2010
5. ^ "Taiwan's AU Optronics to appeal EU fine". The China Post. 2010-12-10. http://www.chinapost.com.tw/business/asia/b-taiwan/2010/12/10/283104/Taiwans-AU.htm. Retrieved 2010-12-11. 
6. ^ "AUO to expand workforce for display, solar sectors". Focus Taiwan News Channel. 2011-03-04. http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aECO&ID=201103040011. Retrieved 2011-03-05. 
7. ^ "AUO assesses damage to LCD panel supply chain". Taipei Times. 2011-03-14. http://www.taipeitimes.com/News/biz/archives/2011/03/14/2003498108. Retrieved 2011-03-13. 
8. ^ "AUO becomes first manufacturer to obtain ISO-50001". Taipei Times. 2011-06-24. http://www.taipeitimes.com/News/biz/archives/2011/06/24/2003506522. Retrieved 2011-06-23. 
9. ^ http://www.taipeitimes.com/News/biz/archives/2009/03/21/2003439022
10. ^ "AUO to recruit research manpower from overseas". Focus Taiwan News Channel. 2011-01-26. http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aECO&ID=201101260048. Retrieved 2011-01-26. 

Awards

02/28/2012 - AU Optronics Corp.'s (AUO's) 8.5 generation plant located in Houli Park in Taichung's Central Taiwan Science Park achieved a Leadership in Energy and Environmental Design (LEED) platinum certification, the rating system's highest level, according to the council. The National Science Council (NSC) added that the AUO plant was called the largest green plant in the world by the United States Green Building Council, the developer of the LEED certification.

External links

• Official website

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