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AUO chairman said that the company is accelerating value transformation

AUO is working hard to transform its value to cope with multiple headwinds, including oversupply, low panel prices and economic uncertainty, said Paul Peng, chairman of the company.

As part of its transformation, AU Optronics appointed former company veteran Frank Keke as president and chief operating officer to replace Michael Tsai.

Ko has extensive experience in the display field and has worked in the display field for 20 years. In recent years, Ko has served as Chairman of E Ink Holdings (EIH), an e-paper solutions provider. Therefore, Ko may provide insights into the display industry from different perspectives and accelerate the transformation of AUO.

Peng said that in addition to the restructuring of the management team, AUO has shifted more IT sheet production capacity from the previous TV panel focus to price pressure.

AUO did see a significant improvement in its product mix in the second quarter of 2019, and the ratio of TV-related revenue to total sales fell slightly from the peak of nearly 50% to more than 30%.

Due to the company's strong product image, AUO's business has not been greatly affected by the US-China trade dispute, Peng said, adding that the company did not get more accidental orders from customers' relocation production.

However, rising trade conflicts have exacerbated market uncertainty, and related economic forecasts have begun to adjust downwards, with consumer markets being the hardest hit. Peng believes that trade conflicts will inevitably bring huge structural changes to the entire supply chain.

Industrial restructuring will make the previous large-scale centralized production model more unstable, replaced by a decentralized small-scale production model, which may significantly increase the overall production cost, thereby increasing the price of consumer goods.

To avoid being trapped in such a vicious circle, AUO and other panel makers must drive value transformation by adding value to integrated displays or solutions for use in the IoT, smart retail, medical, education and automotive sectors. .

To this end, AUO has strengthened its deployment in four areas: healthcare, smart manufacturing, smart retail and circular economy. For healthcare, AUO has established AUO Care to provide healthcare solutions for the Taiwanese and Chinese markets.

Overall, U-Fresh Technology was formed to launch smart water recycling solutions and become part of its circular economy operations. ComQi, a system integration and digital signage solution, has begun to promote its products in the US and Taiwan. The operations of these subsidiaries will increase significantly between 2020 and 2021.