updated 11:10 am EDT, Thu March 31, 2011
AUO said tapped for iPad 2 screen production
A rumor on Monday claimed that AU Optronics had won a major deal to supply screens for the iPad 2. Taiwan's Economic Daily News asserted that the local but fourth-largest LCD company would make the 9.7-inch LCDs to supplement production. It might ship as many as 30 million in one year, or enough to consume more than half the production of its Taichung factory.
AUO hadn't commented on the authenticity of the claim.
The move would be a coup for AUO but has already triggered doubts. An iPad 2 screen's IPS panel is much higher quality than AUO's usual MVA and could be as much as four times more expensive to make, increasing AUO's revenue, but it would also require getting special permission. Hitachi, LG Display, and Sharp are responsible for the core technology behind Apple's screen and would need at least six months to get rights even before adapting the factory.
It would be "quite impossible" for AUO to make iPad 2 displays this year, Primasia Securities analyst Wayne Chenge said. A full 30 million would also be the majority of the 50 million iPads expected to ship this year, although the report implied production was 12 months and would spill over into 2012.
Apple is nonetheless known to have diversified its screen production in relatively short spans of time. Samsung began helping in mid-2010 after it became clear demand was much higher than first thought. AUO is also experienced in producing multiple display types and is more prepared to convert production than others. A 30 million figure would still be high even if it represented optimistic production expectations.