How the Biggest Tiger Keeps Its Roar

AU Optronics Corp. is the third-largest LCD manufacturer in the world, the largest outside of Korea, and the only one of Taiwan's "five tigers" to have turned a profit in 2004. Created in September 2001 by the merger of Unipac Optoelectronics and Acer Display, AU Optronics became the largest of Taiwan's five major LCD manufacturers and was the first company to construct Gen 5 and 6 plants in Taiwan.

In late February, I traveled to the large, brand-new AU Optronics Technology Center (ATC) in the Science-Based Industrial Park in Hsinchu, Taiwan. I went there to see C. T. Liu, AU Optronics Vice President in charge of the ATC.

I started by asking Liu why AU Optronics was profitable when the other tigers were not. He said that AUO was highly profitable in the first half of 2004, which sustained the company during the second half of the year, when things started to get more difficult for everybody. That profitability, Liu said, was based on AU Optronics's great strengths in cost control, inventory control, and operational efficiency. But more than that, it was based on a strong relationship with customers, who had learned that "AU Optronics is a very reliable partner."

"We were the first maker to pass Sony's Green Panel certification, and we have put lots of effort into green design. We recently became a first-tier supplier to Dell, which is not easy." The trick is to continuously "monitor and improve relationships," he said.

"Even before last year, our strategy was to establish a very good product line aligned with our customers' needs in terms of models and advanced technology." A main area of technological focus is response time, and for large panels not just pixel response but also motion-picture response time (MPRT). Last year, AU Optronics was the first LCD manufacturer to achieve an MPRT of 5 msec, Liu said.

"Current LCDs are better than CRTs in many areas, including contrast ratio, resolution, noise level, and color gamut. The only thing that the LCD is worse at is MPRT, in my opinion," he said. "It will be the number one focus for all providers."

After the pixel response time is reduced to a sufficiently low level, one still has to deal with the way an LCD's sample-and-hold driving scheme creates a memory effect in the human visual system from frame to frame, which is one cause of motion blur. Among the approaches being used to overcome the memory effect in LCDs is to use a blinking backlight, or one can do it from the input signal instead. The most common way of implementing this idea today is with black-frame insertion – making part of each frame completely black. "It works, but what is wrong with this approach? Brightness drops by the same percentage as the duty cycle," said Liu. AU Optronics's proprietary technique is to insert a gray frame instead of a black one. With gray-frame insertion, the gray frame has the same average luminance as the real frames. "There is no brightness reduction, but it erases memory as well as black. And the longer you go to gray, the better the MPRT. In actual products, performance, i.e., brightness, CR, and power consumption, is not compromised. MPRT continues to be the number one focus of new technology this year."

I asked Liu what would he like the readers of ID to know. He answered, "In Taiwan, many people are working in this very exciting area that covers a wide range of technologies and sciences. The young engineers are very capable and exciting.

"The ATC, which opened last September, now has 700 employees and will soon have more than 1000. I think that never before have so many young engineers come together to work purely on optoelectronics. It's wonderful. And we would like opportunities to work with good universities and suppliers in the U.S."

Liu worked at Bell Labs for 12 years and may be using memories of the once-great American industrial research laboratories as his model for building the ATC. If he succeeds in making the ATC an optoelectronic Bell Labs in Taiwan, Liu will have created a resource that could keep AU Optronics Corp. roaring for many years to come.

— KIW