Teaming up with Apple is a smart move for just about any business these days.
Taiwanese flat panel display supplier AU Optronics learned today (March 31) just how lucrative such an arrangement can be. After receiving a first time order to deliver flat screen panels for the iPad 2 , shares in the company jump six percent, according to reports.
Taiwan's Economic Daily News said the panels' selling price is three to four times more than regular panels of the same size, providing a boost to AU's profit. The deal is estimated to start at 30 million units a year, and expected to take up over half the capacity of its plant in Taichung, central Taiwan, according to the report.
As the tablet market heats up ─ sales are estimated to grow from 21 million in 2010 to 168 million in 2014 ─ the competition for flat screens is on the rise, as PC manufacturers are also bidding for the displays. Often, there aren't enough component suppliers to satiate growing demand .
For its part, Apple has been spreading its manufacturing bases around Asia. The company recently took a hit after a tsunami and earthquakes rocked Japan's industrial base.
There are five Japanese component manufactures that contribute the overall production of the iPad that could be affected including makers of an electronic compass, the touch screen overlay glass, and the device's battery.
The Japanese government’s recent power brownout policy, combined with radiation pollution, has ground many industries to a halt.
Financial analysts at Piper Jaffray recently noted that the shutdown of any combination of Japanese suppliers would likely cause iPad and iPhone shortages into June
AUO has reportedly reserved half of the capacity of its fifth-generation plant in Taichung for the production of 9.7” displays for iPad 2 and has secured licensing of IPS technology from Hitachi.