AU Optronics Corp (友達光電), the nation's No. 2 flat-panel maker, yesterday said it could be forced to halt its NT$600 billion (US$18.9 billion) Central Taiwan Science Park expansion plans after a court suspended the development of two high-tech zones.
The Taipei High Administrative Court last week ordered an immediate stop to all building activity in the two zones — Cising (七星) in Taichung County's Houli Township (后里) and Erlin (二林) in Changhua County — saying environmental impact studies were incomplete.
“Economic development and environmental protection are equally important, and what we did is aimed at pursuing the biggest benefit for society,” the court said.
The ruling is likely to deal a serious blow to AU Optronics in the battle for market share with South Korean rivals, LG Display Co and Samsung Electronics Co, as well as increasingly sophisticated Chinese competitors.
“We are upset [about the ruling],” said AU Optronics spokesperson Hsiao Ya-wen (蕭雅文) by telephone. “This will greatly impact the competitiveness of the industry and of Taiwan.”
The company's NT$600 billion expansion plans include building two 8.5-generation plants at a cost of NT$200 billion and two 11th-generation plant at a cost of NT$400 billion.
Construction has already started on one of the 8.5G plants in Cising, with mass production expected to begin next year. The plant was to be used to cut TV panels and displays bigger than 42 inches. It was expected to churn out 40,000 sheets of 2,200mm x 2,500mm mother glass per month.
“Now the schedule could be postponed,” Hsiao said. “AU Optronics can only hope the government will be sensible and solve the problem.”
“This is going to be a big headache for AU Optronics,” said Roger Yu (游智超), an LCD industry analyst with Polaris Securities Co (寶來證券).
Without new capacity to support its market share expansion, AU Optronics could be at risk of losing its market position during what promises to be a golden era for the LCD industry over next few years before LCD TV demand starts to decline after 2013, Yu said.
“I don’t see any quick solution and AU Optronics’ case again highlights the problems of land acquisition in Taiwan,” he said.
AU Optronics has captured about 16 percent of the global LCD panel market, trailing Samsung, LG Display and Chimei Innolux Corp (奇美電子), market researcher DisplaySearch's figures show.
Amid growing awareness of environmental issues, Chimei, the nation's biggest LCD panel maker, has also experienced difficulties obtaining land for expansion.
Chimei originally intended to develop a site close to its headquarters in Miaoli, but is reconsidering the plan after it became the target of protests by farmers and environmental groups last month.
The Ministry of Economic Affairs yesterday said the controversy surrounding the Central Taiwan Science Park is set to impact the nation's competitiveness in attracting global investment.
“Companies’ willingness to invest is now dampened by the land development issue ... Who should be held accountable?” Vice Minister Huang Jung-chiou (黃重球) told reporters.
The halt of the science park's development could cause businesses to hesitate before investing capital in Taiwan because of policy inconsistency.
This could jeopardize government efforts to attract more international companies to Taiwan.
Even if the National Science Council appeals against the ruling, it will take quite a long time to reach a verdict, Huang said.
The vice minister said the ministry will mediate in the issue and resolve the land concerns as it is hard to find an alternative parcel of land in Taiwan for companies to set up production facilities.
Meanwhile, the ministry said it is still reviewing AU Optronics' application to set up a 7.5-generation facility in China, adding that approval will be judged on how the firm plans to retain more advanced technology and invest more in Taiwan.
ADDITIONAL REPORTING BY JASON TAN, AFP AND CNA
A wave of stop-loss selling and panic selling hit Taiwan's stock market at its opening today, with the weighted index plunging 2,086 points — a drop of more than 9.7 percent — marking the largest intraday point and percentage loss on record. The index bottomed out at 19,212.02, while futures were locked limit-down, with more than 1,000 stocks hitting their daily drop limit. Three heavyweight stocks — Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Hon Hai Precision Industry Co (Foxconn, 鴻海精密) and MediaTek (聯發科) — hit their limit-down prices as soon as the market opened, falling to NT$848 (US$25.54), NT$138.5 and NT$1,295 respectively. TSMC's
SELL-OFF: Investors expect tariff-driven volatility as the local boarse reopens today, while analysts say government support and solid fundamentals would steady sentiment Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement. Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions. Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in
In a small town in Paraguay, a showdown is brewing between traditional producers of yerba mate, a bitter herbal tea popular across South America, and miners of a shinier treasure: gold. A rush for the precious metal is pitting mate growers and indigenous groups against the expanding operations of small-scale miners who, until recently, were their neighbors, not nemeses. “They [the miners] have destroyed everything... The canals, springs, swamps,” said Vidal Britez, president of the Yerba Mate Producers’ Association of the town of Paso Yobai, about 210km east of capital Asuncion. “You can see the pollution from the dead fish.
ASML Holding NV, the sole producer of the most advanced machines used in semiconductor manufacturing, said geopolitical tensions are harming innovation a day after US President Donald Trump levied massive tariffs that promise to disrupt trade flows across the entire world. “Our industry has been built basically on the ability of people to work together, to innovate together,” ASML chief executive officer Christophe Fouquet said in a recorded message at a Thursday industry event in the Netherlands. Export controls and increasing geopolitical tensions challenge that collaboration, he said, without specifically addressing the new US tariffs. Tech executives in the EU, which is