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AU Optronics targets to quadruple 8.5G capacity

Post Time:Aug 05,2009Classify:Company NewsView:292

AU Optronics Corp (友達光電), the world’s third-largest liquid-crystal-display (LCD) panel maker, yesterday said it planned to quadruple output at its 8.5-generation (8.5G) fab before the end of the year to meet a rapid across-the-board rise in demand.

The announcement follows the company’s comment two weeks ago that it did not see any “unfavorable factors” to the LCD industry in the second half of the year, helped by the seasonal computer shopping spree in the third quarter and Chinese buying ahead of the Lunar New Year in the fourth quarter.

AU Optronics said it would be able to supply only 80 percent of customer demand this quarter, which could drive up average selling prices by between 5 percent and 10 percent in the July-to-September period.

To alleviate the shortage, AU Optronics chief executive Chen Lai-juh (陳來助) said the company “hopes to increase output as soon as it can.”

Average equipment utilization is approaching full usage, Chen said.

On June 23, the company hiked its target capital spending for this year to NT$75 billion (US$2.3 billion), from its previous estimate of NT$60 billion.

The company plans to increase output at its advanced 8.5G fab to full capacity, or 40,000 sheets of glass substrates per month, by the end of the year, compared with 10,000 sheets now

The 8.5G fab in Taichung processes bigger glass substrates, which can be cut into six sheets of 52-inch panels for LCD TV, or eight sheets of 46-inch panels.

AU Optronics also raised its forecast of global LCD TV demand by 14 percent to 125 million units, from its previous estimate of 110 million units, because of faster replacement of bulky cathode-ray-tube TVs and older LCD TV models.

Demand comes primarily from emerging markets such as China, India and Iran, company chairman Lee Kun-yao (李焜耀) told reporters yesterday.

The company is also evaluating the possibility of building a panel production line in China to be closer to customers and save on a potential rise in tariffs on LCD display modules.

Taiwanese panel makers are only allowed to assemble LCD modules in China, but the Beijing government is reviewing a longstanding ban on manufacturing LCD panels to help Taiwanese firms fend off competition from South Korean rivals.

Shares of AU Optronics fell 0.82 percent to NT$36.50 yesterday, outpacing the benchmark TAIEX, which lost 1.43 percent.
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Source: taipeitimesAuthor: shangyi

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