by CIO Staff

AU Optronics Absorbs Quanta Display

Oct 02, 20062 mins

Taiwan’s AU Optronics, the world’s third-largest maker of liquid crystal display (LCD) screens, completed its acquisition of Quanta Display, an important step forward for much-needed consolidation in the industry.

Although users have benefited for years from intermittent oversupply in the LCD industry, which has helped keep prices low, companies in the industry have started to combine to shore up the supply situation. The deal between the two Taiwanese LCD panel makers has resulted in a larger, more viable company in a much better position to take on the two market leaders in South Korea.

AU Optronics paid for Quanta in shares of stock, a deal valued at approximately US$2.2 billion when it was announced in April.

The companies gained approval for the takeover from regulators and shareholders prior to closing the deal. It immediately turns AU Optronics into a more potent rival for South Korea’s Samsung Electronics and LG.Philips LCD. Prior to the deal, AU ran a distant third to the two Korean companies, but now its output capacity and market share put it far closer to the companies, although it remains in third place.

K.Y. Lee will remain the chairman of AU Optronics, and H.B. Chen will remain the company’s president. The company did not plan to lay off any workers after the deal. AU Optronics’ global workforce increased to more than 42,000 from 29,000 before the acquisition. The LCD industry is growing so fast in Taiwan that companies have had to offer ever greater incentives to attract enough workers for their factories.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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