AUO Outlines a Tepid Recovery Strategy
April 29, 2019
AUO’ President and COO Michael Tsai expects to transition its LCD business designed to offer low cost commodity products into one focusing on emerging technologies such as 8K displays, foldable smartphones, autonomous driving, AI and IoT in 2019. AUO's three-pronged strategy; development of technology innovation, scenario applications and smart manufacturing has an ultimate goal of ramping up value growth at the company, Tsai said. AUO will shift its focus from commodity products to IoT and 5G applications using smart manufacturing to deliver related products to clients and end markets. The new products apparently include ultra 65-, 75- and 85-inch 8K TVs supporting HDR technology, 120Hz high refresh rate, and quantum dot’s (QD) wide color gamut and come with ultra slim bezels (a 3.5mm) and ultra-wide viewing angles, such as a 65-inch 4K TV panel that delivers a brightness of up 1,500 nits. AUO claims a 50-60% share of the global gaming panel market, and up to 80-90% in the premium gaming panel segment, including
AUO is developing all-screen through-hole, ultra-slim bezel LTPS-based handset panels in 2019 and using TDDI chips. The company is a minor supplier of VR applications hopes to deliver displays for AR in 2019, with the first batch having a resolution of 1,045ppi and 1,000 nits for industrial maintenance, inspection, training and other professional purposes, Tsai concluded. From DigiTimes
AUO profited from the bump in ASP’s for large area LCDs in 2017, when LG and Samsung reduced global capacity by converting LCD into OLED fabs, but that caused AUO and other Taiwanese display makers to become more dependent on commodity products until they were overwhelmed by the new capacity in China. AUO is now adopting Samsung’s LCD TV strategy and looking for minor markets not immediately targeted by the Chinese, such as gaming monitors. What is missing from Tsai’s discourse is any indication of what capabilities the company will bring to bear on grow the growth areas of IoT, AI or 5G. Short of the required competencies, AUO is just trying to squeeze the last bit of production out of its 6thand 8thGen Fabs, while it waits for the inevitable dissolution ala CPT or perhaps a takeover. Neither AUO nor Innolux have demonstrated unique technology to compete long term with the Korean or Chinese display makers.