AUO, Eternal Chemical to set up LCD liquid-chemical venture

This article was published by the Taiwan Headlines on May 26, 2006. It reports that AU Optronics (AUO), Taiwan's no.1 and the world's no.3 maker of TFT-LCD panels, recently announced its plans to set up a liquid chemical material venture with Eternal Chemical Co., Ltd. The new venture is expected to extend the up- and down-stream integration efforts of AUO into the petrochemical sector.

Most significantly, the new venture between AUO and Eternal Chemical is expected to break the long-term monopoly in Taiwan's diffuser market, which is currently held by Wah Hong Industrial Corp. Wah Hong currently cooperates with the world's largest diffuser maker, Keiwa of Japan.

The new venture will develop and manufacture liquid chemical materials used in LCD productions processes, such as polyimide (PI), which is used in making alignment films.

According to industry observers, Eternal Chemical has successfully developed home-grown LCD diffuser products, in addition to some liquid chemical materials for LCD production processes. The company has installed the first set of diffuser production equipment, and is scheduled to install a second line in the fourth quarter of 2006. Meanwhile, Eternal Chemical's plant in Suzhou in China's Jiangsu Province is scheduled to begin mass production of various optical-film products (including diffusers) in the third quarter of 2007.

According to industry observers, AUO and Eternal Chemical's final goal is to extend production of products from the diffuser market into producing triacetate cellulose (TAC) film. One of AUO's subsidiaries, Daxon Technology Inc., is already producing polarizers, whose key parts include TAC films.

Currently, Japan's Fuji Photo Film Co. accounts for more than 75 percent of the global TAC-film supply. But the company is very conservative about its capacity-expansion steps.