Industry news

TFT-LCD panel maker AU Optronics (AUO) is not worried by China-based competitors' government-supported fast expansion of production capacity because the Taiwan-based firm's competitiveness is in different market segments, according to AUO chairman and CEO Paul Peng.

China-based makers mainly produce panels of common specifications for use in entry-level products and/or for large-volume production, while AUO has been moving toward customized production for market-niche application, Peng explained.

AUO has hiked barriers for competition through improving product technology, operational management and production efficiency, Peng said. China-based makers' capacity expansion will bring competitive pressure, but AUO is ready to face it, he added.

AUO is in good health in terms of profitability and assets/liabilities ratio and will set up new capacity only if this can create higher value and secure orders, Peng noted. AUO also keeps upgrading production capacity to increase high-end panel output, Peng indicated.

Samsung Display and LG Display are expanding production capacity for OLED panels and China-based makers are also setting up OLED panel lines, but Peng said OLED's share of the global panel market will still be very small in the next five years or more, and LCD panels will remain mainstream, Peng noted.

Global demand for 65- and 75-inch LCD TV panels will significantly increase in 2017, AUO president and COO Michael Tsai said. With monthly production capacity of 220,000-230,000 65-inch LCD TV panels, AUO expects to ship more than two million units of such panels in 2017. AUO produces 50- and 75-inch LCD TV panels at its 7.5G line and 43-, 55- and 65-inch units at its 8.5G one.