With display becoming a crucial communication interface for smart living along with proliferating 5G, IoT and AI applications, AUO has kicked off a three-prong scheme seeking to build a high value-added ecosystem and become more competitive in the LCD panel industry, according to company chairman Paul Peng.

Now that China-based LCD panel makers have over 60% of the global production capacity, the Chinese government has sharply cut its subsidies for them by 50-60%, significantly slowing down their capacity expansions, and Korean makers are withdrawing from the LCD market, noted Peng.

Peng told Digitimes that the global LCD panel industry will restore reasonable market mechanisms and enter a new stage of competition based on the actual strengths of the makers. In this regard, Taiwan's panel makers will have strong advantages in corporate governance, supply chain management and customer deployment, he stressed.

To stay competitive and extend its lead over peers amid the changing industry environment, AUO is keenly enforcing a three-pronged project: "Go Premium," "Go Vertical" and "Smart Investment 2.0," Peng said.

For "Go Premium," AUO will continue to move ahead with display technology as the core. Currently, 90% of AUO's revenues come from panels and solar energy, and the company will leverage its technology and manufacturing capabilities accumulated over the years to fast develop high value-added products, such as 8K, bezel-less TVs, gaming panels and mini/micro LED displays.

As for "Go Vertical," AUO will again use display technology as the core and combine it with AIoT applications to provide vertical solutions, aiming to maximize the extension of panel values, starting from displays and extending to systems, solutions and services, according to Peng.

He disclosed that AUO's independent subsidiary AUO Display Plus will serve as a growth engine for its "Go Vertical" deployments, focusing on public and general displays, and engaging in strategic cooperation projects in various fields including commerce, transportation, manufacturing, healthcare and education while integrating AIoT technologies to expand digital business opportunities.

Under "Smart Investment 2.0," AUO will focus its investments on the fields of smart retail, smart healthcare, smart education, smart transportation and smart manufacturing, apart from continued investment in boosting production capacity for quality products, Peng noted.

Smart manufacturing is particularly a segment receiving the largest efforts from AUO. Its subsidiary Mega Insight is dedicated to providing smart production solutions, big data analysis and industrialization software to help enterprises promote digital transformation. Another subsidiary Edgetech mainly offers related smart manufacturing hardware services.

AUO has also invested in Adlink Technology as the largest corporate shareholder in the IPC maker, which will join forces with the two subsidiaries to further deepen deployments in the smart manufacturing segment, according to Peng.

In the future, competition will exist not only between individual companies but also among different ecosystems, Peng stressed, and to build a competitive ecosystem, more efforts must be made to streghthen internal global deployments, implement localized operations and integrate forces from the entire value chain.