Highlights:

I. Industry

AUO has launched a series of new businesses, including the areas of 3D, AMOLED panels, e-paper and solar cells. It set up AMOLED panel production facilities at its 3.5G factory in Taiwan, aimed at mass-production from end-2010. AUO announced in August 2010 that it aims to obtain a 50% share of China's 3D TV panel market through the mass-production of 65 inch 3D TV panels, targeting China's high-end TV market.

AUO has also started the mass-production of e-papers from July 2010 and now expects its market share in China's e-paper market to rise to 6-8% in 2010 and 20-30% in 2011, respectively. Backed by its experiences in panel manufacturing (panel manufacturing process is similar to those of thin-film solar energy technology), AUO plans to kick-start the mass-production of thin-film solar photovoltaic modules from 2011.

Creating a new product portfolio helps AUO improve its competitiveness, as well as posing a challenge for corporate management. For the second quarter of 2010, AUO saw shipments of small- and medium-sized panels decline by 2.7% on a quarter to quarter basis but its profitability grew by 18% to 10.15 Taiwanese dollars. The per-1 ㎡ price of AUO panel rose to US$847 in the second quarter of 2010 from US$841 the previous quarter. New businesses are based on multiple acquisitions, while the creation of synergy between new businesses and between new businesses and existing TFT-LCD businesses faces challenges ahead.