Flat-panel maker AUO Corp (友達) yesterday said it is shutting down two production lines in Tainan to optimize its manufacturing capacity, leaving about 200 employees affected.
AUO said that about 100 employees, half of the affected workers, had accepted the company’s severance program and the other half agreed to take new positions at other manufacturing sites.
Those two production lines produce flat panels used in TVs, monitors and notebook computers.
Photo: Chen Mei-ying, Taipei Times
“Considering the impact of shrinking demand and the supply-demand situation in the long term, the company is to close the C5D and C6C fabs in Tainan and relocate some capacity to other production sites,” AUO said in a statement.
The two production lines had been running at a low utilization rate, AUO said.
The company had been in discussions with employees about potential relocations since March, it said.
AUO in April said it planned to convert an older-generation LCD fab in Taoyuan’s Longtan District (龍潭) into a microLED panel production site in preparation for rapid uptake of the new display technology in 2025.
The latest announcement came as the company gradually emerged from the industry’s worst slump in history driven by a supply surplus and faltering market demand. AUO has reported a five-quarter streak of quarterly losses since the second quarter last year.
To escape the industry’s boom-and-bust cycles, AUO has been striving to improve its technologies to make better-margin panels and broaden its business scope to provide total solutions and new sectors beyond flat panels, such as solar energy, smart retailing and smart healthcare.
The company’s microLED technology, which is considered a cost-effective display technology compared with OLED technology, is to enter mass production in the second half of this year, it said.
Non-panel businesses last year accounted for 14 percent of the company’s total revenue and it is targeting expanding the revenue contribution from non-panel businesses to 20 percent within three years, it said.
Rival flat-panel maker Innolux Corp (群創) earlier this year also divided its businesses into flat panels and non-display businesses. The company’s total auto solution and X-ray detector businesses were spun off. Non-display businesses made up 20 percent of Innolux’s revenue last quarter, it said.
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