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As China-based competitors keep expanding production capacities, Taiwan-based AU Optronics (AUO) has been unable to maintain the status of being the globally third-largest LCD panel maker and therefore has shifted focus of competition from production capacity to commercial value of products, according to company chairman and CEO Paul Peng.
Under government support including subsidies and protective customs duties, China will sooner or later replace South Korea as the largest panel-producing country, Peng said.
Large production capacities not necessarily translate into profitability and influence in industry, Peng noted. For example, AUO has a global market share of only 12-13% for LCD TV panels but is a major supplier of high-end TV panels and a dominant one in the monitor segment, Peng indicated., adding this is what AUO regards as commercial value.
In order to maintain competitiveness, AUO has adopted a strategy of smart investment, that is, considerable investment in production capacity specifically for realizing R&D results to generate commercial value, Peng indicated. A typical case of smart investment is a 6G LTPS LCD factory in Kunshan, eastern China, with the factory to kick off production of panels for use in high-end smartphones and notebooks in November 2016, Peng said.
Founded 20 years ago, AUO plans to hike value-added application of panels through extending production to touch sensors and touch panels as well as stepping into integration of various products for application to smart retail operation, Internet of Vehicles (IoV) and Internet of Things (IoT) over the next 20 years, Peng indicated.
AUO chairman and CEO Paul Peng at a company event on October 1
Photo: Michael Lee, Digitimes, October 2016
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