AUO Group to Invest NT$30 B. for LED-Chip Capacity Expansion

Taipei, Aug. 27, 2009 (CENS)--To satisfy the strong demand for light-emitting diodes (LEDs) used in thin film transistor-liquid crystal display (TFT-LCD) panel backlights, the AU Optronics Corp. (AUO) Group, the largest thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer in Taiwan, recently decided to invest NT$30 billion (US$923.08 million at US$1: NT$31.9) to set up four LED chip production factories in Taiwan. Construction works is to start in the fourth quarter this year and the facilities will kick off mass production in late 2010.

The four LED chip factories will be operated by Lextar Electronics Corp. Industry sources said that AUO Group's move is expected to impact heavily on other LED-chip suppliers in Taiwan.

AUO just poured NT$2.56 billion (US$78.6 million) to procure several metal organic chemical vapor deposition (MOCVD ) equipment for expanding Lextar's capacity. H.B. Chen, Lextar's chairman, claimed that his company's role in local LED chip industry would grow.

Industry insiders pointed out that Lextar now is still a relative-smaller player and AUO purchases most of its needed LED chips used in panel backlights from local and Japanese suppliers. AUO is scheduled to turn all of its panels into LED-backlight products by the end of 2010, creating a huge demand for such lighting source.

Industry sources said that LED-backlight panels are the necessary trend. All the leading global LCD TV brands are scheduled to push full-series LCD-backlight TV sets in 2010, with some local companies to do the same late this year.

DisplaySearch, the worldwide leader in display market research and consulting, forecasted that the LCD TV application would be the next growth momentum for LCD backlights. This year, the market-research firm said, shipments of LED-backlight LCD TVs are about 3.6 million units, while the volume is expected to grow rapidly to 15.1 million in 2011.