AUO, TPV to Set Up Joint Venture in Brazil

AU Optronics Corp has announced the cooperation with TPV Technology Ltd to set up a joint venture in Brazil as its strategy to build a foothold in South America.

Temporarily named Brivictory Industria de Electronicos Ltda, the joint venture will be capitalized at $16 million, with 19 percent invested in by AUO and the remainder by TPV and will engage in LCD back-end processing, as well as assembly and sales of display panels. The venture is scheduled to kick off volume production in the first quarter of 2011.

Optimistic about huge business potential in Brail, which ranks as the world's fifth largest country by population and has had bright economic prospects for years, AUO indicates that consumer demand for LCD TVs in the market is expected to explosively surge in the coming years, not to mention that the upcoming World Cup Football 2014 and Olympic Games 2016 hosted in the country will further drive the growth.

In fact, AUO and TPV have established another joint venture in Poland in March 2010, which is also engaged in back-end production of LCD modules and assembly of TVs. Therefore, the newest joint venture in Brazil has been seen to further reinforce the cooperation between both sides and generate mutual benefits.

Besides, through the cooperation, AUO is expected to take advantage of TPV's ample experience in tapping the Brazilian market for LCD TVs to venture into South America. Presently, TPV has ranked as No.4 LCD TV brand in the market.

From another viewpoint of tariffs, industry insiders note, construction of the joint venture is also imperative for them to explore Brazil’s LCD TV market, mainly because the move will allow their locally made LCD modules to be exempted from a 17 percent tariff imposed on imported models.

Source: CENS