Paul Peng, executive vice president of AUO, pointed out that his company originally estimated that shipments to China would shoot up 300% to 400% this year, but has raised such forecast to 400% to 500%. He added that AUO's LCD module (LCM) joint venture with Sichuan Changhong Group in Sichuan Province of China, the BVCH Optronics (Sichuan) Corp., is scheduled to kick off mass production by the end of 2009 with initial annual capacity of three million TV panels. Peng said that in addition to Changhong, the LCM plant might also supply other TV makers in neighboring provinces in China.

The vice president said that the sales of LCD TV globally is estimated to reach 125 million units this year from 110 million previously due mainly to the accelerating replacement of cathode-ray tube (CRT) TVs. In China between 400 million to 500 million CRT TVs are waiting to be replaced with LCD counterparts.

Declining LCD TV prices is also accelerating replacement purchases, Peng said. Between 2003 and 2004, when LCD TVs were first launched, the price of a 32-inch LCD TV then can now buy five today. In addition, replacement purchases are also driven by consumers who bought LCD TVs five to six years ago but now need higher performance models for better picture quality or new multimedia formats such as the blu-ray DVD.

In the first half, LCD TV sales in major markets exceeded most market expectations, Peng said, including a 25% year-on-year (YoY) increase in the U.S., 35% in Europe, 34% in Japan, and 65% in mainland China.