Smart manufacturing enhances profitability at AUO, Innolux

Rebecca Kuo, Tainan; Yusin Hu, DIGITIMES Asia 0

AUO and Innolux have both posted handsome profits for the second quarter of 2021, buoyed by not only rising LCD panel prices and favorable product mixes but also smart manufacturing they have developed internally.

AUO reported a net operating profit of NT$20.3 billion (US$727.8 million) for the second quarter; Innolux reported NT$23.8 billion for the same period.

Since 2015, Innolux has been focusing on automation, smart manufacturing, and then smart operation. President James Yang said automation diminishes the manpower needed in production, so even during COVID, Innolux could still operate on the same capacity.

Internally, Innolux went through digital transformation and increased the capability of smart manufacturing. As a result, production yield rose and costs went down. Innolux applied smart tech to designing, manufacturing, testing, and eventually on operating. Smart operating bases production priorities on profits and available materials and then helps deliver the products more correctly.

Due to the pandemic and extreme weather, shipping costs have risen. 97% of Innolux's products, however, are delivered without a misstep from factories to clients. Its digital transformation complements smart manufacturing and operating, hence better competitiveness.

Since 2015, Innolux's started building automated production lines. By 2021, lights-out module assembly reached 71% in coverage. Innolux's ability to produce day and night makes it one of the top two suppliers among 76% of its major clients. Yang said the smart operation effectively downscales the needed module production lines and improves the quality of manufacturing and operation.

AUO has not largely increased production capacity until this year but the shipped panel area has been on the rise, thanks to smart manufacturing. According to AUO's data, productivity rose 30% over the past three years.

To AUO, smart manufacturing improves productivity and yield, further raises fill rate. It also helps the company be more prescient of problems that might have happened.

AUO's management style has changed as well. From reactive to proactive, the company has seen an overall increase in competitiveness, in revenue and profit, and more positive feedback from clients.

AUO has 13 manufacturing spots around the world. After seeing the results of smart manufacturing, AUO established AUO MegaInsight, Edgetech, and AUO Digitech to provide related services. MegaInsight and Edgetech have generated hundreds of millions (NTD) in revenue and have over 20 stable clients.

AUO Digitech positions itself as a provider of digital transformation. Its smart manufacturing solutions and digital transformation services incorporate man, machine, material, method, and environment through scientific technologies.