U-Chip International Limited

Taiwan-based AU Optronics Corp. (AUO), a supplier of display panels, has signed a memorandum of understanding (MOU) with Japan's TMD (Toshiba Mobile Display) to acquire the latter's Singapore-based subsidiary AFPD Pte Ltd., in a bid to compete against its Taiwanese counterpart Chimei Innolux Display Corp. and further wield its influence in the global supply chain of display panels.

AUO noted that the acquisition, allegedly valued at about JPY10 billion (US$1 billion at US$1: JPY100), is scheduled to be completed by the end of this July. The move will help the firm to outpace Chimei Innolux in the race for the world's largest supplier of low-temperature polysilicon (LTPS) TFT LCDs, industry insiders indicate.

Founded in 2001, AFPD is a joint venture between Toshiba Corporation and Matsushita Electric Industrial Co., Ltd., specializing in the manufacture of LTPS TFT LCDs with excellent mass production and related technologies as its intelligence properties. After acquiring the firm, AUO will also obtain these cutting-edge technologies, paving the way for the firm's joining the segment for display panels for high-end handsets.

Industry insiders stress that only few companies, like Samsung, are capable of massively producing LTPS LCDs or AMOLED (active-matrix organic light-emitting diode)-backlit LCCs in the world now, and hence supply of such high-end panels often lags behind demand, making their selling prices three times those of traditional TFT panels. In short, AUO is expected to carve out considerable niches in the segment.

AUO states that TMD has been engaged in the development of LTPS TFT LCDs and applied such panels to high-end notebook PCs for years. As TMD's subsidiary, AFPD turns out 45,000 LPTS TFT LCDs per month along with 4.5-generation technology, and will help AUO to boost its total capacity of such panels in the future. At present, AUO produces the panels on its 3.5-generation production lines.