AU Optronics second advanced plant to be built

By Chinmei Sung TAIPEI, Bloomberg

AU Optronics Corp., the world’s third-largest maker of liquid-crystal displays, said it will finish construction of its second liquid-crystal display plant that can produce larger glass panels by the end of the year. The new 7.5-generation plant will have initial capacity of 40,000 sheets of glass a month, AU told reporters in Taichung, Taiwan. The factory is being built next to the Hsinchu, Taiwan- based company’s existing facility in Taichung, which uses the advanced technology.

The company began operating its first 7.5 generation plant in October last year. The facility produces 22,000 sheets of glass a month at present and will be expanded to produce 60,000 when it starts running at maximum capacity in the third quarter, AU said.

A 7.5-generation LCD factory, which costs about $2.5 billion to $3 billion to build, can produce television screens measuring 40-inch, 42-inch and 46-inch diagonally.

Chief Executive Officer, K.Y. Lee, reiterated that the company expected sales to rise from the second quarter. The company said in February that profitability would improve from the second quarter as oversupply eases.

Global LCD panel supply will rise 35 percent in 2007, compared with a 40 percent growth in demand, H.P. Chang, an analyst at Witsview Corp., a Taipei-based market research firm, said in a phone interview on March 6.

“The oversupply problem will ease; there will be even some shortage in supply in the second half,” said Chang.

AU Optronics today also reaffirmed its earlier spending plans for this year. The company plans to raise capital spending in 2007 to as much as NT$95 billion from NT$87 billion in 2006, AU said in February.

The company’s shares rose 3.8 percent to NT$46.80 in Taipei.