AUO's Automotive-display Panel Shipments to Grow by 30%: President Peng

Paul Peng, president of AU Optronics Corp. (AUO), a major maker of thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan, recently said that his company will refocus on the industrial and commercial markets, while gradually lowering production of consumer-electronic application panels.

AUO has won automotive-display orders from the top-five international automakers and top-three in Japan, with such orders to last at least several years. The firm expects its automotive-display panel shipments to increase by at least 30% annually over the next few years.

Peng made the statement at AUO's recent new-technology demonstration, saying that industrial and commercial panels include mainly automotive, PID (public information display), automatic telling machine (ATM), medical etc. applications.

Currently, industrial and commercial panels account for more than 18% of AUO's overall revenue, and the ratio is expected to continue rising.  The expanding production of the higher-margin industrial and commercial panels is expected to effectively upgrade AUO's profitability. Peng pointed out that orders for industrial and commercial panels are quite stable, but there is relatively higher technical thread for newcomers. Automotive panels, for example, must work within a temperature range of -40 and +90 Celsius, in addition to high reliability and safety requirements. He added that the expanding automotive-electronics market and increasing global new-car sales volume suggest very bright future for automotive-application panel products.

Regarding the PID application market, Peng said that AUO has won orders from MacDonald's in southern Taiwan's Tainan for ordering total solutions, which  is expected to be adopted by other fast-food chain-stores in Taiwan in the future.

Peng analyzed that the life cycle of many consumer-electronic products is very short, between three months and up to one year; but that of industrial and commercial displays are required to be three to 10 years, implying stable orders.

Thanks to increasing demand for center-console information displays and multifunction monitors for eco-friendly vehicles, shipments of automotive TFT-LCD panels increased about 16% year-over-year to exceed 65 million units in 2013, and an annual volume of more than 90 million units are forecast to be shipped by 2017, according to a recent report released by NPD DisplaySearch.