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AU Optronics Reports Third Quarter 2005 Results (2005.10.25)

AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) today released unaudited consolidated results for the three months ended September 30, 2005. All financial information was unaudited and was prepared by the Company in accordance with generally accepted accounting principles in Taiwan ("ROC GAAP"), the amounts in New Taiwan Dollars ("NT$") were translated into US dollars (US$) at NT$33.18 per US$1.00 based on the noon buying rate by the Federal Reserve Bank of New York as of September 30, 2005. 

AU Optronics' third quarter 2005 revenue reached NT$59,505 million, (US$1.8 billion) represents a 28.7% sequential growth. Gross margin and net margin for the third quarter rose to 15.6% and 9.9%, which helped net income and fully diluted earnings per share to reach NT$5,821 million (US$175 million) and NT$1.05, respectively. For the nine months ended September 30th 2005, revenue totaled NT$144.6 billion (US$4.4 billion), net income NT$4.2 billion (US$125 million), basic EPS NT$0.75 per common share, and US$0.22 per ADS share. 

AU Optronics' CFO and Vice President, Mr. Max Cheng stated that, "We are pleased to have concluded a record quarter for AUO. Our third-quarter and nine-month results reflect the strong performance of our product mix. AUO's complete fabrication facilities, effective cost control, improved product efficiencies, all contributed to our record quarter gross profit of NT$9,276 million, while gross margin improved to 15.6% from 6.8% of the previous quarter. Operating margin also grew significantly to 9.9% from 1.1%. Our operation efficiency has enhanced inventory days to a record low, down to 28 days from 32 days of the previous quarter." 

Dr. Hui Hsiung, Executive VP of AUO also noted, "AUO has shipped over 21 million units of large-sized panels and 38 million units of small-medium sized panels for year-to-date, a double-digit jump of 58.2% and 61.4% respectively. The deployment of TV strategy has aggressively enhanced TV sales to increase from 18% in the second quarter to 22% in the third, while the ratio of monitor sales reduced from the previous quarter of 54% to this quarter of 47%." 

At AUO's TaiChung site, its G6 capacity reached 50,000 substrates per month at the end of September 2005. It expects to reach 60,000 substrates by end of year 2005 and fully ramp up to 90,000 substrates by 2nd quarter 2006 on a monthly basis. AUO's third G5 fab, commenced its commercial production in 3rd quarter '05 and has ramped up to 20,000 substrates monthly capacity by the end of September. It is expected to ramp up to 50,000 substrates monthly capacity by end of the year and further up to 60,000 substrates by end of June 2006. 

In the coming quarters with the new capacity of its latest fabrication facilities (G5 and G6), the Company is believed to be in tune to meet the demand of the emerging LCD TV market. Dr. Hsiung added, "AUO has the efficient product lines for each and every Generation Fabs. This enhances AUO's competitive advantage and flexibility in the industry. Furthermore, the newly developed technologies for HDTV, such as the AMVA, will ignite AUO's performance in this area." 

On the October 24th Edition of BusinessWeek, AU Optronics was ranked 13th best performer in " The 2005 Asian BusinessWeek 50 ". In the line-up, AUO is the top pure-play TFT-LCD manufacturer ranking before any other. 

* 3Q'05 Basic EPS was calculated based on 5,574 million shares, to reflect the adjustment of total weighted average outstanding shares of 5,489 million plus ADR issuance of 330 million shares.