AUO CEO Not Worried about Chinese or OLEDs
February 28, 2017
 
AUO chairman and CEO Paul Peng has enjoyed ASP growth in large panels and says they are not worried by China-based competitors' government-supported fast expansion of production capacity because the firm's competitiveness is in different market segments. 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. Regarding OLEDs Peng continues to say 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. 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.  However, all of this macho talk will be good for perhaps one year as it is clear that supply of large panels will start exceeding demand this year and that the Gen 10.5 fabs, which begin entering production in 2019 will have a distinct cost advantage for 65” TV panels made on AUO’s Gen 8.5 fabs.

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