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AUO and Toppan Printing Announce Strategic Alliance in Color Filter Supply Chain (2006.08.08)
AUO to Acquire 39.7% Shares of Toppan CFI (Taiwan)
Hsinchu, Taiwan,

AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) and Toppan Printing Co., Ltd. today announced their strategic alliance in the color filter business for liquid crystal displays in Taiwan. The extensive alliance, which has been approved by Boards of Directors of both parties, ensures a wide range of joint effort in color filter supply and business operation as well as technology. AU Optronics will take a 39.7% equity stake in Toppan CFI (Taiwan), currently a subsidiary of Toppan Printing that manufactures color filters in Taiwan. 

The formation of the new alliance not only signals a synergy of the ties between Taiwan and Japan corporates in cross-border collaboration of two leading multinationals in the global flat panel display industry, but also enhances AUO’s supply chain in color filter business and its long-term cost competitiveness without repetitively capacity investment. 

This alliance between AUO, one of the world leading manufacturers of liquid crystal displays and Toppan Printing, one of the top world manufacturers of color filters for liquid crystal displays, is expected to largely strengthen their collaboration through teaming up in a broadly unified partnership to maximize capacity usage, economic benefits and technology cooperation. Toppan is anticipated to ensure its robust position and leading market share in Taiwan color filter business, while AUO will solidify its stable supply in color filter and enjoy the competitive cost benefits as well as the cutting-edge technology support from Toppan. 

AUO added that key components of the TFT-LCD supply chain will be essential especially with the merger of Quanta Display Inc (QDI) on Oct 1st, where there will be a need for supply of color filter for all generation fabrications. By taking an equity investment in Toppan CFI (Taiwan), AUO optimizes the win-win strategy to leverage Toppan's leading strength in color filter technology and AUO’s excellent manufacturing capabilities and execution, since the long-term partnership with Toppan Printing. 

With the alliance, two board members of Toppan CFI's Boards of Directors will be appointed by AUO. Toppan Printing will appoint the Chairman and President, while the Chief Financial Officer will be appointed by AUO. The alliance is anticipated to turn a new page in cross-border collaboration in upstream supply chain in liquid crystal displays. 

About Toppan Printing 

Toppan Printing Co., Ltd. was founded in 1900 in Japan. From modest beginnings, it gradually climbed into a leading position in the printing industry; the company has recently been shifting its focus into the electronics and multimedia industries in line with the advances made in information technology. Toppan is determined to become a leader in the information and communications sector. Toppan Printing has 7 major business fields: Security and Cards, Publications Printing, Commercial Printing, Packaging, Industrial Materials, Electronics, and Multimedia. In its color filter business, Toppan is No.1 color filter supplier in the world. 

About Toppan CFI (Taiwan) 

Construction of Toppan CFI (Taiwan) Co., Ltd. founded by Toppan printing started in Tainan Technology Industrial Park in April 200 and completed in March 2002. Its mass production for the 4.5th generation commenced in July 2002, then mass production of the fifth generation color filters officially started in March 2003. The official start-up of volume production for the sixth generation was May 2005.