Haier and AU May Enter Strategic Alliance

Taipei, Oct. 21, 2009 (CENS)--Haier Group, China's largest home-appliances maker, is likely to enter strategic alliance with AU Optronics, Taiwan's leading flat panel display supplier, an arrangement which will give the latter a strong boost in its effort to expand its share in the Chinese market, according to the Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (TEN).

Zhang Ruimin, chairman and chief executive officer of Haier, may discuss the alliance tie with K.Y. Lee, chairman of AU, during his upcoming visit to Taiwan from Oct. 25; the alliance will cover the three aspects of FPD procurement, R&D, and technological cooperation.

Lee stated that he is not in a position to confirm the meeting and spokesman of the company declined to comment on the information, citing the requirement of quiet period on the eve of its upcoming investor conference.

The alliance, if materialized, will greatly facilitate AU's effort to raise its share in the Chinese market to 20% this year, up from 16% in the second quarter, the third largest, thereby narrowing its lag behind Chi Mei Optoelectronics, the largest FPD supplier in the market which boasts 33% share. Haier is already the second largest buyer among Chinese brands for AU.

On the other hand, the alliance will give a strong support to Haier to catch up with leading LCD TV brands in the Chinese market, including Konka, TCL, and Hisense. Haier, China's leading white-good supplier boasting 26.2% share, is sparing no effort in making inroads into the TV market in recent years. The capacity of China's LCD TV market will top 22 million this year and is expected to become the world's largest market in several years, due to the replacement demand in the Chinese market, whose annual demand now for CRT (cathode ray tube) TVs reaches 400 million units, the world's largest.