AUO Corporation ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO) today signed a memorandum of understanding ("MOU") with Fujitsu Limited and Fujitsu Display Technologies Corporation on comprehensive collaboration in the Liquid Crystal Displays (LCDs) field. The extensive collaboration, which has been approved by Boards of Directors of both parties, covers a wide range of joint effort in R&D, technology, manufacturing capability and business development. The collaboration includes also an equity investment to be made by AU Optronics in Fujitsu Display Technologies Corporation.

As part of the collaboration, AU Optronics will take a 20% equity stake in Fujitsu Display Technologies Corporation, currently a wholly owned subsidiary of Fujitsu Limited that develops, manufactures and markets LCDs, with the remaining 80% to be held by Fujitsu Limited. The companies will join forces in the development of advanced design, process and production technologies, as well as manufacturing capacity cooperation. In addition, AU Optronics will be entitled to use Fujitsu Display's intellectual property, to further promote Fujitsu's advanced display technologies through cross-licensing and other technology cooperation agreements going forward.

The formation of the collaboration signals a important milestone in the global flat panel display industry, representing not only ground-breaking cross-border collaboration of two leading multinationals, but also further enhancing the ties between Japan and Taiwan corporates in response to the tectonic shift in the fundamental economics of the global flat panel display industry, as premier players team up in a broadly unified partnership to maximize business potential, economic benefits and cost efficiencies.

" Fujitsu is a global LCD technology leader with remarkable intellectual property such as the state-of-the-art wide view angle MVA ("Multi-domain Vertical Alignment") technology widely adopted for large size LCD panel applications." Said Mr. KY Lee, chairman and chief executive officer of AU Optronics. "The partnership sets an example for the industry, bringing together Fujitsu Display Technologies' accumulated expertise in advanced LCD design and technologies and AUO's prowess in manufacturing, and signifies an innovative form of collaboration that has expanded beyond mere technology transfer to a broad based system-wide cooperation - the combined leading technologies and world-class manufacturing capabilities of both parties will further solidify our leadership position in the flat panel display industry."