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    AUO Peng Shuanglang: Tariff is to focus on the double-edged sword panel industry

    In the face of the rapid rise of China's panel industry and the triumph of Korean companies in (AMOLED), where will China's Taiwan panel industry go?

    Peng Shuanglang, general manager of AUO Optoelectronics, one of the Taiwanese two tigers, said in an exclusive interview with the reporter of China Business News on April 11 that the development of Taiwan's panel industry has shifted from seeking to quality, and he suggested that the mainland should carefully consider upgrading the panel. Import tariffs.

    Raising tariffs is a "double-edged sword"

    The mainland's 8.5-generation line will increase to 8-9 in 2015. By then, the mainland will surpass Taiwan and become the second largest LCD panel production base in the world after Korea. How will the Taiwan panel industry be repositioned?

    Peng Shuanglang said frankly that due to the slowdown in overall market demand and financial considerations, the Taiwan panel industry has basically no capacity expansion in the past three years. However, there has been no stopping in terms of technological advancement and application expansion.

    a€?Our existing investment is already very large. AUO accounts for 15% of the global LCD panel supply.a€? Peng Shuanglang said that in 2013, AUOa€?s turnover was 84.496 billion yuan. a€?How big is the volume? Creating value is more important." Accelerate high-resolution, 4K (Ultra HD), curved surfaces, narrow borders, wide color gamut and other technical applications, "this is not to expand production capacity."

    Peng Shuanglang said that in the past, it was an alternative growth stage. Display and TV changed from CRT (CRT) to flat panel; now it is entering the application innovation stage, and new applications such as public signage, smart home, and car display are developed. a€?The extra cash deducted by AUO will be used for technological innovation.a€? However, AUO will increase its production capacity moderately when appropriate.

    In 2012, China introduced the import tariff on LCD panels from 3% to 5% to support the just-initiated domestic panel industry. This year, the domestic production of the three 8.5-generation lines of BOE Hefei, Samsung Suzhou and LGD Guangzhou will be added. During the "two sessions", Li Dongsheng, chairman of the TCL Group, as the representative of the National People's Congress, suggested that the country further increase the import tariff on LCD panels from 5% to 10%.

    In this regard, Peng Shuanglang believes that tariff increase is "one body on both sides." It can protect the panel makers in mainland China, but there have been many examples in the past. The better the protection, the worse the industry competitiveness. Instead, let them compete with other manufacturers, many companies will find their own path to survival.

    The ceiling panel import tariff is raised, and the mainland panel factory is happy, but the color TV brand and consumers will increase the tax burden. Because 8.5 generation wire cutting products are limited, many panels also need to be imported. "If the tariff is raised, the wool will be on the sheep." Peng Shuanglang said.

    Peng Shuanglang revealed that the Taiwan region has negotiated economic and trade cooperation with the mainland and has always wanted to put the panel into it, but it has not yet been included in the framework of trade in goods. a€?I have participated in the Cross-Strait Flat Promotion Association and have been reminding whether the promotion of tariffs can really play a role. In addition, it is strongly reflected by brand customers that once tax increases are inevitable, it will inevitably increase the price to consumers.a€?

    However, AUO is also mentally prepared for tariff increases. Peng Shuanglang said that the 8.5-generation line only accounts for 15% of the total production of AUO panels. The mainland produces 130 million TV sets per year, including 40 million domestic sales and 90 million overseas sales. Because the import tariff on the panel of export TV can be refunded, "we will increase the cooperation with domestic brands in export sales."

    In addition, AUO has set up module factories in Suzhou, Shanghai Songjiang and Xiamen, and glass substrates imported from Taiwan to the mainland. Peng Shuanglang said that the import tariffs on the mainland panel have increased, and that AUO has "only half the tax rate."

    Kunshan LTPS project "reduced generation" for efficiency

    The next-generation display technology, AMOLED, has become a new investment hotspot for the panel industry in Korea and China. This year, there will be a number of AMOLED lines in mass production in China. Under the circumstances that there are not many new investments, how does the Taiwan panel industry layout new display technologies?

    Peng Shuanglang said that the application of large-size AMOLED panels on TV is still immature. In the small and medium-sized AMOLED field, after Samsung, AUO has become the second panel factory with mass production capability in the world.

    AMOLED has several key points, one is LTPS (low temperature polysilicon) backplane technology, the second is OLED yield, and the third is material use efficiency, which affects cost. Peng Shuanglang believes that AMOLED is suitable for flexible products. AUO has invested a lot of manpower and material resources in research and development on small-size OLEDs.

    At the end of last year, AUO began mass production of AMOLED panels on the 4.5th generation line, capable of making 5.7 inches and more than 500 PPI (pixels per inch). However, Peng Shuanglang revealed that the production capacity has not been fully utilized, nor has it produced a large number of mainstream sizes. "We are still accumulating experience."

    A more important reason is that the LCD panel of the LTPS backplane is more cost-effective for customers. Subject to scale, AUPS LTPS backplane capacity will be the first to meet the needs of LCD panels.

    This year, AUO changed the Kunshan 8.5 generation line under construction to the 6th generation line, and plans to introduce LTPS technology. Peng Shuanglang explained that the first is that there are too many domestic 8.5 generation lines; the second is that the development of intelligent mobile terminals is fast, the LTPS panel is energy-saving and widely used; the third is that AUO has 3.5 generations and 4.5 generations of LTPS production lines in Taiwan, and the Kunshan factory can be improved. layout.

    Chinaa€?s smartphone sales account for one-third of the worlda€?s total, with 1 billion units worldwide and 360 million units in China. Moreover, domestic consumers are more willing to try new products with high resolution and large size. a€?The domestic mobile phone brand is very fast, 'China Cool Link' has entered the top ten in the world, and some even entered the top five. AUO has set up a factory in Kunshan, hoping to become the first choice for high-end products of domestic mobile phone brands.a€?

    Peng Shuanglang revealed that the AUO Kunshan 6th generation line project has been built, and a€?is doing mass production financing, and mass production can be carried out in mid-2016a€?. The Kunshan project will be promoted in several stages with a total investment of 3.2 billion US dollars. The biggest problem now is financing. He believes that it can be supported by local governments and financial institutions.

    For the rumors that AUO and Taiwana€?s other panel giants have merged together, Peng Shuanglang said that there is no real action because the two sides have no complementary effect.

    (This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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