AU Optronics Plans to Expand Due to Booming LED Panel Demand

To accommodate the booming demand of LED panels, leading panel maker, AU Optronics Corp, has decided to invest over $900 million to build four LED chip production plants under its subsidiary Lextar in Central Taiwan Science Park. The project is slated to begin in the fourth quarter this year, and it is expected to start production by the end of 2010. Lextar Chairman H.B. Chen indicated that going forward, Lextar’s role in supplying AUO’s LED chip demand will become increasingly important.

According to a Central Taiwan Science Park Administration official, Lextar may lease up to 10 hectares of land to build the plant. He added that following Lextar’s expansion, the park will soon become a stronghold for LED chip production.

Recently, AUO invested some $77 million in purchasing MOCVD equipment for the expansion of Lextar’s LED chip equipment. Since Lextar still operates on a smaller scale, the LED chips used in AUO’s panels are still acquired from Japan and other LED chip suppliers in Taiwan. However, as AUO’s demand booms, the supply will be filled from within the group. Notably, as Lextar’s production of LED chips ramps up, it might impact LED chip makers Epistar and FOREPI heavily. By the end of 2010, AUO plans to fully adopt LED backlight in its notebooks, generating remarkable demand.

In addition to the rapid expansion of its LED chip production, AUO is simultaneously increasing its LED packaging capacity, including expansion plans for LightHouse Technology and Wellypower Optronics. The move is aimed at completing the integration of its LED upstream and downstream supply chain.

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