Several stories swirled around Taiwanese panel maker AUO this week. First, the company recently announced it is cancelling plans to build two (!) Gen 11 fabs on 200 hectares in the yet-to-be-built Erlin Science Park, reported Bryan Chuang and Steve Shen in Digitimes today. Since AUO would have been the lynch-pin of the park, occupying over 30% of the area and making a capital investment of US $13.6B, the decision puts the go-ahead on the entire science park in jeopardy.
Whether to cancel or repurpose Erlin has become a hot political potato in Taiwan, although it’s probably not of particular interest off-island. Whether AUO will build one or more Gen 11 lines elsewhere is of more general interest, and there do not seem to be any announcements on that yet. Interestingly, AUO’s one-time commitment to Erlin was instrumental in getting Taiwanese government permission to build its joint-venture Gen 8 plant in Kunshan, China, said Chuang and Shen, with an initial capital investment of roughly US $813M. The last I heard from sources in Kunshan, that project is going forward.
Story Number 2. AUO is talking to Sony about jointly producing AMOLED-TV sets, according to a story that appeared in Yomiuri Shimbun yesterday. Previously, we heard stories that Sony was talking about buying AMOLED panels from LG Display. LG Display makes more sense for the short run, since LGD actually has plans to make large TV-sized displays this year, while AUO is in the throes of getting 4.3-inch OLED displays out of its first OLED volume-manufacturing facility.
That Sony will want to work with somebody is a foregone conclusion. That once grand but now battered company does not have the manufacturing facilities to make large quantities of TV-sized AMOLED panels, and, given the company’s huge losses, it is unlikely that Sony would consider building a Gen 8 AMOLED fab on its own. But building one with a company that is not a competitor might appeal to Sony as a longer-term solution.
Price estimates from industry-watchers for the 55-inch AMOLED-TVs Samsung and LG have promised to produce in the second half of this year are in the vicinity of $10,000. Before we get to the price point that would stimulate high-volume sales, AUO might be ready to participate. Of course, by that time Samsung and LG would have a couple of years of experience manufacturing large AMOLED displays, but demand might well justify the participation of other players.
Story Number 3. I am finally ready to believe AUO’s promise that it will produce significant volumes of an AMOLED display in Q2′12. AUO says the initial product will a 4.3-inch, quarter HD display which will consume 370 mW to produce 300 nits luminance. The price for a 4.3-inch AMOLED panel is $45-$55, said Rebecca Kuo and Alex Wolfgram in Digitmes yesterday, compared to $29 for a comparable TFT-LCD. Significant price differentials don’t seem to be much of a problem for the high-end smart phone market. We’ll have to see whether the applications that are appropriate for more moderately specified displays are also tolerant of these price differentials.
Last week, I promised you an article on the six reasons Samsung’s large- screen TFT-LCD manufacturing activities will find themselves under the control of the AMOLED manufacturing group. The promise was conditional on there not being any breaking news I felt I should write about, and there was. However, this question will be with us a while, and I will bring the story forward at the first opportunity.