AUO Chairman Mulls Over Potential SEA Production

Panel maker AUO Chairman Paul SL Peng revealed on Dec. 2 that he is evaluating to set up specific factories in the Southeast Asian region, citing the U.S.-China trade war as the main backdrop.

The trade war has created a "single world with two systems," Peng said, as the global production chain has continued to "regionalize" and become shorter. AUO is considering its clients' movements and could consider moving its display panel production lines into Southeast Asia.

For automotive panels, Peng said they are also evaluating adjustments and would not rule out setting up production in the same region as their auto clients.

On Wednesday, Peng's remarks would be his first public comments on Southeast Asia's potential production base. AUO has set up most of its production in Taiwan and China, while it only has two factories outside Singapore and Slovakia, housing a 4.5 OEM and module factory, respectively.

While AUO has yet to make any public announcements, Peng said he based his previous stay in Malaysia for over nine years.

AUO would not consider moving its TV and laptop production overseas, Peng said. TV panel production has already moved from module delivery to an "Open Cell" model for clients to handle final assemblies. In terms of laptops, its panel production only makes up 20% of total costs, Peng said, compared to display panels that make up over 70% of total costs. Allowing downstream firms to oversee laptop panel assembly would be more convenient, he added.

Innolux Corp, on the other hand, had already announced its plans to invest in Taiwan last year, with projects to expand factories in the Hsinchu Science Park and the Southern Taiwan Science Park. The two factories would focus on automotive panels, ultra-large TV panels, and display panels. Media reports indicate that Innolux does not have plans to expand to Southeast Asia.