Taiwan's Ministry of Economic Affairs (MOEA) has allowed AU Optronics (AUO) to set up a 7.5G TFT-LCD panel production plant in Kunshan, China, but its Korea rivals received their own government's approvel much earlier. Taiwan's terms are also stricter in order to keep the most advance production technology on the island. Taiwan panel makers are described as competing with Korea panel makers with their hands tied. But Taiwan's economics minister Shih Yen-Shiang has remarked that if there is a consensus in society that Taiwan makers should be allowed to build even more advanced fabs in China, the MOEA could revise its restrictions on panel generations.
Taiwan's premier, WU Den-yih, has emphasized several times that government policies can be changed. The government will modify its policies based on professional opinions, discussion with scholars and public opinion.
Shih noted that AUO has made plans for several major investments in Taiwan in the next decade, and the government has also made plans for Taiwan's panel industry for the next decade, including ways for the government to actively assist panel makers to gain intellectual property and encourage Taiwan panel makers to invest in 11G production.
But the MOEA has won little appluase for the giving the green light to AUO's 7.5G plant in China mainly because it came after the Korea government already allowed Samsung Electronics and LG Display to set up a 7.5G and 8.5G plant respectively in China, which will significantly weaken AUO's competitiveness in there. Moreover, Taiwan's policy can hardly catch up with the changes in the overall environment, with AUO waiting nine months before receiving the approcal.
Market rumors have indicated that Chimei Innolux (CMI) plans to hand in an application for constructing a panel fab in China in the first half of 2011. Officials at the Industrial Development Bureau under the MOEA has indicated that CMI's most advanced plant is an 8.5G fab, and if CMI wants to build a 8.5G plant in China, the MOEA will not allow it due to the current restrictions.
Article translated by Yvonne Yu
