AU Optronics to Merge Quanta Display

AU Optronics to Merge Quanta Display

HSINCHU, Taiwan, April 7 /Xinhua-PRNewswire-FirstCall/ -- AU Optronics Corp. ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) and Quanta Display Inc. ("QDI" TAIEX:3012) today announced that they have signed an agreement to merge Quanta Display Inc (QDI) with and into AUO. The merger agreement was approved this afternoon by the Boards of Directors of both AUO and QDI. The consolidation date of the merger is targeted for October 1st, 2006, at which time QDI will be absorbed into AUO. The merged entity will operate as AUO. The swap ratio for QDI to AUO would be 3.5 to 1, subject to be approved by the shareholders meetings of both AUO and QDI, and to be after AUO's increase of its paid-in capital.

After the merger taken place, two board members of AUO's Boards of Directors will be appointed by QDI. Mr. KY Lee and Mr. HB Chen will remain as Chairman/CEO and President/COO of AUO, while Mr. CC Leung will be appointed as Vice Chairman.

AUO's Board of Directors today also adopted a proposal recommending distribution of NT$0.3 cash dividend and 3 percent stock dividend (30 shares for every 1,000 owned) per common share and employee profit sharing in the form of NT$379,735,891 in cash and 88,605,041 in stock shares. The proposal will be discussed and approved at the Company's regular shareholders' meeting, scheduled for June 15, 2006.

Quanta's Chairman, Mr. Barry Lam stated that the strategic partnership combines the unique complementary strengths of both companies, especially in technology, product mix, customer portfolio, and different generations of manufacturing facilities. It not only creates the economy of scale and enhances the global competitiveness, but also offers an extensive product and technology portfolio as well as better service.

Mr. KY Lee, AUO's Chairman, reiterated that the merger will achieve the following objectives:

- The resource especially in finance and human resources of Taiwan TFT-LCD
industry will be re-shuffled and re-organized to create more powerful
competitiveness. The consolidation of its kind and scale in Taiwan will
take better advantage of funds and talents and bring long-term positive
contribution to the whole industry.
- AUO's capacity in area will exceed 19% market share globally, and
immediately make it equivalent to its counterparts in Korea. In
addition, its consolidated capacity of G5 & G6 fabs will reach No.1
position, plus the on-going capacity expansion on new generation
fabrication, which will ensure AUO's leading position in TFT-LCD
Industry.
- AUO's strong execution after its former merger in 2001 has proved itself
a top tier player in TFT-LCD industry. Also AUO will add over few years
of managerial experience and successful merger practices, to ease the
challenging merger process and upgrade its scale to global TFT-LCD
leader.

Mr. CC Leung, Quanta's Vice Chairman, noted that this strategic alliance will strengthen the future collaboration between AUO/BenQ group and Quanta Group.

Mr. HB Chen, AUO's President, added that the synergy of the consolidation would be demonstrated in three dimensions. First, the supply chain consolidation will be essential to the purchase of key components and the close partnership with supplier. Secondly, the research and development consolidation will expand design expertise and solidify a robust intellectual property portfolio. Lastly, the consolidation will leverage mutually complementary product portfolio of the two companies, especially in NB and TV applications, to increase a more completed customer portfolio.

All of these factors will allow AUO to bring the strengths of both companies together and raise its international competitiveness in TFT-LCD industry characterized by fast development and the growing trend towards concentration of capital and technology. The merger is expected to result in a strong long-term positive contribution to the equity of shareholders of AUO and Quanta Display Inc.

ABOUT AU OPTRONICS

AU Optronics Corp. ("AUO") is the world's third largest manufacturer* of large-size thin film transistor liquid crystal display panels ("TFT-LCD"), with approximately 14.2%* of global market share and generated revenue of NT$217.4billion (US$6.75 bn)* in 2005. TFT-LCD technology is currently the most widely used flat panel display technology. Targeted for 40"+ sized LCD TV panels, AUO's next generation (7.5-Generation ) fabrication facility production is scheduled for mass production in 4Q 2006. The Company currently operates one 6th-generation, three 5th-generation, one 4th-generation, and three 3.5-generation TFT- LCD fabs, in addition to four module assembly facilities and AUO Technology Center specializing in new technology platform and new product development. AUO is one of few top-tier TFT-LCD manufacturers capable of offering a wide range of small- to large- size (1.5"-46") TFT-LCD panels, which enables it to offer a broad and diversified product portfolio.

* As shown on DisplaySearch Quarterly Large-Area TFT-LCD Shipment Report
dated Mar 1, 2006. This data is used as reference only and AUO does not
make any endorsement or representation in connection therewith. 2005
year end revenue converted by an exchange rate of NTD32.2039:USD1.

Safe Harbour Notice

Except for statements in respect of historical matters, the statements contained in this Release are "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These forward-looking statements were based on our management's expectations, projections and beliefs at the time regarding matters including, among other things, future revenues and costs, financial performance, technology changes, capacity, utilization rates, yields, process and geographical diversification, future expansion plans and business strategy. Such forward looking statements are subject to a number of known and unknown risks and uncertainties that can cause actual results to differ materially from those expressed or implied by such statements, including risks related to the flat panel display industry, the TFT-LCD market, acceptance and demand for our products, technological and development risks, competitive factors, and other risks described in the section entitled "Risk Factors" in our Form 20-F filed with the United States Securities and Exchange Commission on June 3, 2005.

FOR MORE INFORMATION
Yawen Hsiao
Corporate Communications Dept.
AU Optronics Corp.
No.1, Li-Hsin Road 2, Science-Based Industrial Park,
Hsinchu City, 300, Taiwan, R.O.C.
Tel: +886-3-5008899 ext 3211 Fax: +886-3-5772730
Email:yawenhsiao@auo.com

Source: AU Optronics Corp.

CONTACT: Yawen Hsiao, Corporate Communications Dept., AU Optronics
Corp., No.1, Li-Hsin Road 2, Science-Based Industrial Park, Hsinchu City, 300,
Taiwan, R.O.C., Tel: +886-3-5008899 ext 3211, Fax: +886-3-5772730, Email:
yawenhsiao@auo.com

Web site: http://www.auo.com/

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