AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday said its board had approved plans to build two TV panel module assembly joint ventures in China, aiming to strengthen its presence in the fast-growing Chinese market.
The investments with Chinese TV makers TCL Multimedia Technology Holdings Ltd and Haier Group (海爾) are the latest efforts by AU Optronics to deepen its partnership with Chinese TV makers to fend off growing competition from the newly merged Chimei Innolux Corp (奇美電子).
Last summer, AU Optronics formed a TV panel assembly venture with a smaller Chinese TV maker, Changhong Electric Co (長虹), in Sichuan Province, China.
“With the new business model of allying with its leading brand customer, AU Optronics can not only ensure stable product shipments, but also provide TCL on-time and value-added services to seize global business opportunities together,” a company statement said yesterday.
AU Optronics and a TCL subsidiary, TCL King Electrical Appliances (Hui Zhou) Co (TCL, 王牌電器), plan to invest US$12 million initially on the TV panel module assembly venture in Guangdong Province, the statement said. AU Optronics would own 51 percent of Huizhou Bri-King Optronics Co Ltd (智翔光電), while TCL King Electrical would hold 49 percent.
Last year, AU Optronics grabbed a 15 percent share of the Chinese LCD TV panel market, lagging far behind the combined market shares of Chi Mei Optoelectronics and Innolux, which captured 31 percent, figures from market researcher DisplaySearch showed.
TCL, the third-largest LCD TV maker in China, shipped 4.6 million LCD TVs last year and aims to expand shipments to at least 6 million units this year, DisplaySearch said.
In a separate statement, the Hsinchu-based panel maker said the board also gave the go-ahead to set up another LCD TV panel module factory with Haier in Qingdao, Shandong Province, with initial investment totaling US$7 million.
AU Optronics would hold 70 percent of the venture, Qingdao Haier Optronics Co Ltd (青島海爾光電), while Haier would own 30 percent. Haier ranks No. 6 among Chinese TV makers.
It plans to ship 2 million LCD TVs this year, up from last year’s 1.3 million units, DisplaySearch said.
AU Optronics’ board also approved issuing up to US$800 million in corporate bonds and will use the proceeds to buy equipment.
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