By PAN CHI-I and FRANCES HUANG
July 29, 2010
"AUO will make the investments through its subsidiary in China, BriView Electronics Corp., tapping the markets in Europe and America," said Hsiao Yawen, an AUO spokeswoman.
In 2008, AUO and Qisda Corp., another Taiwanese electronics firm, set up the Chinese TV set production joint venture, with AUO taking a 60 percent stake and Qisda holding the remaining 40 percent.
Paul Peng, executive vice president of AUO's Global Business Unit, cited heavy tariffs imposed on large-sized flat panel TV sets in Europe and America as the major reason AUO and Qisda want to set up production bases there.
Peng said BriView is likely to establish TV set assembly facilities in the Czech Republic, where AUO runs a flat panel assembly plant, but the joint venture is also considering other options.
In America, Peng said, BriView may choose Mexico. The United States will be an unlikely site for the new investment due to high production costs, he said.
BriView, which has been contracted by major global TV vendors to produce light-emitting diode (LED) TV sets on an OEM basis, is expected to ship about one million TVs this year, less than the company had previously estimated.
Peng said the joint venture is expanding, however, to boost its monthly production capacity to 200,000 to 300,000 units in the near future.
In China, AUO also operates flat panel assembly plants on its own in Suzhou, Songjiang and Xiamen, while it is working with Chinese home appliance firms, such as Sichuan Changhong Group, Haier Group and TCL Group, to run flat panel assembly facilities.
On Wednesday, AUO posted NT$11.25 billion (US$351 million) in net profit for the second quarter -- up 54.6 percent from the first quarter -- on the back of strong global demand.
An improved product mix that accommodates a high portion of LED panels boosted the company's gross margin to 15.8 percent in the second quarter from 12.8 percent in the first quarter.
Peng said LED panels accounted for 22 percent of its total panel production in the second quarter, beating the global LED panel ratio of 17 percent.
He said AUO's LED panel ratio is expected to rise to 30 percent in the third quarter and reach 50 percent in the fourth quarter.
