Aug 26, 2016: Paul Peng, the CEO of AU Optronics (AUO) has appreciated Taiwan’s Ministry of Economics Affairs (MOEA) plan of vertically incorporating the nation’s OLED supply chain. However, at the same time, Peng has also expressed concerns that the Taiwanese government should apply concrete rule and follow through, during the opening ceremony of Touch Taiwan 2016, which will be held at Nangang Exhibition Center in Taipei, Taiwan.
Following the announcement of MOEA’s plans to invest $ 3.21 billion in Taiwan’s OLED industry, Peng has urged the Taiwanese government to follow through on its OLED plan, and requested the government to lift some financing rules. On the domestic front, the nation’s panel industry ace funding issues. There are several limitations placed on company bonds issuance procedure and, financial regulations cap loan applications from a single bank at 15% of the company’s net value, according to Peng.
Potential of AMOLED
Flexible AMOLED will be a important to the next generation of developments in Taiwan’s panel industry, said Peng. AUO for instance has filed more than 700 AMOLED patents, with 400 being flexible AMOLED patents. AMOLEDs will play a significant role in the future of the nation’s display market, due to the displays properties of being flexible, thin, and capacity to revamp appearances of wearable devices in high-end applications.
The stringent financing regulations are applicable in three major industries in Taiwan including DRAM, panelmakers, and the construction industry. These financing limitations in Taiwan’s capital market make it difficult for panel manufacturers to expand production capacity, according to Peng. The lack of financial subsidies from Taiwanese government has made it hard for local OLED panel manufacturers to contend with Chinese and Korean vendors, and is lagging behind in technology and production capacity, according to a spokesperson from Innolux.
The rise of China’s display industry is also a threat to Taiwan’s panel industry. Chinese display vendors have been expanding production capacity, leading to intense market competition, and low retail prices, said Peng. Yet, Taiwan’s panelmakers have been in the market far longer than Chinese counterparts.
The matter is developing effective government policies to vertically add manufacturers, and help local companies developments in niche markets. For example, AUO is developing professional gaming monitors to battle against Chinese manufacturers’ big volume of entry-level products in the general market.