AU Optronics Hopes to Add Color to E-paper Trend

AU Optronics, one of the world's largest makers of LCD screens, hopes to begin producing color e-paper screens by the end of next year and diversify into the solar energy industry, according to executives at the company.

Interest in e-paper has soared with demand for e-book readers such as Amazon.com's Kindle and Sony's Reader Digital Book. The trend picked up steam in Taiwan in June, when the Taiwanese contract manufacturer of Kindle, Prime View International, acquired E-ink Corporation of the U.S. in a US$215 million deal.

E-paper screen technology is designed to be flexible and thin for e-book readers. Currently, e-paper uses various shades of gray to make screens look as much like real book paper as possible. AU hopes to next year start producing color e-paper able to mimic paper as well as offer a color experience for Internet and other uses, according to C.T. Liu, an executive vice president at AU.

AU showed off regular e-book reader screens at a trade show in June in Taipei and plans to start producing them in 6-inch and 9-inch sizes this quarter. The company has worked with advanced screen technology for a variety of products, including touchscreens. Most of its e-paper technology comes from working with Sipix Imaging, an e-paper company in the U.S. in which AU holds a stake.

AU is also moving aggressively into solar energy, part of a trend in the technology industry caused by a global rise in electricity use and high oil prices. Last week, for example, the chairman of Taiwan Semiconductor Manufacturing (TSMC) said he believes solar energy, green technologies and LEDs (light emitting diodes) could be a US$10 billion to $15 billion business opportunity for his company over the long term.

AU also wants a piece of that action. The company plans to start selling raw materials used in solar panels and other solar energy devices, made from some of the ingredients used in LCD panel manufacturing, including thin film and silicon.

"Demand for solar energy is still quite strong. Governments all over the world are moving in this direction," said K.Y. Lee, chairman of AU Optronics, at a news conference in central Taiwan on Tuesday.

In June, AU announced a deal to eventually buy a majority stake in M.Setek, a Japanese manufacturer of polysilicon and monocrystal silicon wafers, which are used in solar cells.

The Taiwanese company also established an energy company called AUO Energy Taiwan Corp. (AET) to provide work such as installing solar energy systems at power plants, factories, commercial buildings and houses.

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