AUO Exits Panels, Pivots to AR, Satcom

In an interview conducted in Hsinchu this week, AU Optronics Chairman Peng Shuang-lang stated frankly that the display panel industry has weathered storms for decades. From a peak in 2007 with earnings per share exceeding eight yuan to a trough marked by consecutive annual losses totaling 115 billion yuan over the following two years, AU Optronics’ operational history serves as a microcosm of the volatility in the display industry. Chairman Peng noted that to mitigate the excessive revenue fluctuations caused by economic cycles, the company has adjusted its target for pure panel business revenue to account for only 30 percent of total company revenue by 2030. The strategic focus is shifting toward emerging fields such as augmented reality (AR) glasses, low Earth orbit satellites, micro-light-emitting diode (micro-LED) optical communications, and advanced packaging.

In the display panel market, global demand has gradually shifted from traditional liquid crystal displays (LCD) to high-end OLED and micro-LED technologies. Although AU Optronics once held a foothold in the OLED sector, rising process costs, overcapacity, and price competition with giants such as Samsung and LG have compressed profit margins. Facing this market environment, Chairman Peng indicated that AU Optronics will use "advanced packaging" as a breakthrough point. By integrating optical communication technology, the company aims to develop efficient optical fiber and photonic crystal components for AR glasses and low Earth orbit satellites, thereby entering the high-profit optical communication market.

AR glasses, considered a core application for future smart living, impose stringent requirements on display technology regarding high resolution, low power consumption, and lightweight design. AU Optronics has initiated collaborations with multiple AR device manufacturers to research micro-LED and micro-optical waveguide technologies, with the goal of bringing products to market by 2026. Low Earth orbit satellites represent an emerging hotspot in international space communications. Leveraging its technological advantages in optical communications, AU Optronics is designing optical fiber modules capable of operating in extreme environments, providing higher bandwidth and lower latency solutions for global satellite networks.

Micro-LED optical communications represent another potential market. Compared to traditional computer optical fibers, micro-LED technology achieves higher emission power and wider bandwidth in smaller form factors, making it suitable for smartphones, in-vehicle displays, and wearable devices. AU Optronics has completed several key technological breakthroughs in the research and development phase and plans to commercialize the products by 2028, further diversifying revenue risks associated with a single display panel segment.

During the interview, Chairman Peng also mentioned that AU Optronics’ future revenue structure will become more diversified. Beyond traditional panels and advanced packaging, the company will further develop optical communication chips, photonic components, and related software services. This diversification strategy not only reduces reliance on a single market but also enhances the company’s competitiveness within the high-tech industry chain. Although panel revenue is expected to continue declining in the short term, in the long run, AU Optronics is creating more stable value for shareholders through technological innovation and market diversification. (Source: Central News Agency)