AUO, a major panel manufacturer, is evaluating setting up a module factory in the United States

In response to the issue of U.S. tariffs, Peng Shuanglang, chairman of panel manufacturer AU Optronics, said today that the production sites will adopt the most optimal layout; considering operational efficiency, the front-end panel process will not be set up in the United States, and at this stage it is only possible to evaluate the back-end process or assembly production in the United States.

AUO held an online corporate briefing today, during which Peng Shuanglang pointed out that the company is not currently considering moving its front-end panel factories to the United States. If it were to set up large-scale front-end process production lines in the United States, then ship the semi-finished products out of the United States for assembly, and then ship them back to the United States to be taxed, it would not be cost-effective at all.

He explained that AUO acquired BHTC, a Tier 1 supplier of German auto parts and related services, and added bases in Mexico and other countries to its global layout. Although it will consider moving the back-end process to the United States, it will ultimately look for tariff concessions or the best location for production; in addition to the US market, it will also expand the Southeast Asian and European markets. In the face of high US tariffs, China will be expected to adopt the maximum stimulus plan for domestic demand, and AUO can also seize the Chinese market. Peng Shuanglang said that in the face of US tariffs, panels are components, and end products are the focus of taxation. AUO's direct and indirect sales to the United States account for about 10% to 15% of its revenue, and direct sales to the United States will affect about US$200 million.

He believes that the high tariffs imposed by the United States may cause the industry to pass on costs to American consumers, and the consumption power of many necessities of life will be affected; the reduced consumption power of the American people will affect the overall manufacturing and purchasing rate, resulting in a downward revision of the economic growth rate. The recent downward revision of the global economic growth forecast by the International Monetary Fund (IMF) reflects the tariff issue. He emphasized that because Mexico and Canada still enjoy the advantage of suspended tariffs, AUO sells to the United States through its Mexican factory. In the first quarter of this year, in addition to the increase in demand for display products, automotive solutions and vertical field businesses also grew steadily. Due to the optimization of product portfolio, gross profit improved significantly compared with the fourth quarter of last year. Peng Shuanglang pointed out that the seasonal demand for panels this year was originally expected to be disrupted by the tariff issue, but the impact of festivals from the fourth quarter of last year to the first quarter of this year and China's old-for-new policy, coupled with the demand for early stocking due to tariffs, still drove demand in the first quarter. As for the uncertainty of tariffs, it still needs to be observed in the future. AUO General Manager Ke Furen said that in response to the large-scale display, it will expand the layout of e-paper, cooperate with E Ink to add module production lines, and actively invest in the next generation of display technology micro light emitting diodes (MicroLED).