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AUO to scale down expansion efforts in mainland China

TAIPEI, Taiwan -- AU Optronics (AUO, 友達) yesterday announced the company's decision to scale down production expansion efforts in China, while indicating that it expects a new facility to enter the mass production phase by 2016.

AUO stated that investments slated for its Kunshan-based joint venture company will be scaled down in response to inclement market conditions, and that original plans for an 8.5-generation plant have been scaled down to produce 6th-generation panels.

The company received approval from regulators across the strait to build an 8.5-generation display panel plant three years ago, however, progress of the facility have been stalled as the global display panel market have been plagued by over-supply, according to reports. Currently, construction of the production plant is complete, however absent of any manufacturing machinery.

The company stated that the move is designed to capitalize on anticipated growth in China's market for smartphones and tablet computers. In addition, the 6th-generation plant will utilize the low-temperature polysilicon fabrication process in catering to the requirements of high end devices.

The Kunshan-based facility is a joint venture formed by AUO and the People's Government of Kunshan, who are holding stakes of 49 percent and 51 percent, respectively.

More details will be revealed by the company on its Jan. 27 earnings conference.

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