AUO Will Return to Profitability in 2012, Display Chief Says

The year 2011 was a tough one because, in the flat-panel display (FPD) industry, most of the manufacturers including those based in Taiwan, a major production center for LCD panels, fell into the red.

For example, in the third quarter of 2011, AU Optronics (AUO) Corp, which is one of the major TFT LCD panel makers in Taiwan, recorded a loss with a 9.2% decrease in gross profit margin and a 17.0% decrease in operating profit margin. We interviewed Paul SL Peng, president, Display Business Operation of AUO, about the company's strategies to return to profitability. (Interviewer: Naoki Tanaka, Tech-On!)

Q: What do you think about the conditions of the FPD market in 2012?

Peng: We expect that the global FPD market will achieve positive growth in 2012. We even expect that the growth rate of large panels, for which demand was low in 2011, will be 10% for TVs, 4% for notebook computers and 3% for monitors on a year-over-year (YoY) basis (in terms of unit sales).

Also, we believe that the market for business-use notebook computers and monitors will expand. As for notebooks, the ratio of the "ultrabooks," which are proposed by Intel Corp, will increase. And as for monitors, the market for all-in-one types, which are panels integrated with desktop computers, will grow.

Q: Based on your perspective on the year 2012, what kinds of strategies do you have for your FPD business?

Peng: We expect that the demand for large panels used for monitors and TVs will grow by 10% in 2012 on a YoY basis. So, we will increase shipment volume accordingly.

Though we are not planning to expand our production capacity, we will increase the operation rates of our plants. Currently (as of December 2011), their operation rates are 75 to 80%. But we aim to raise them to 90% in 2012. By the way, we aimed at 90% for the year 2011 at first but had to adjust production due to drastically changing market conditions.

In addition, we want to grow our business of middle- and small-size panels for smartphones and tablet computers and make it a core business. In 2011, we acquired Toshiba Mobile Display's TFT panel manufacturing plant in Singapore to expand production capacity. It has a 4.5-generation production line for low-temperature polycrystalline silicon (Si) TFT panels (substrate size: 730 x 920mm) and a production capacity of 45,000 sheets per month.

source