AUO Corporation ("AUO" or the "Company") (TAIEX: 2409; NYSE: AUO), announced today its plans to transfer PDP (Plasma Display Panel) division from the present pilot run status to research and development mode, in pursuit of improving technology with lower cost of production.

According to H.B. Chen, President of AUO, the accomplishments of its PDP Division thus far is substantial. However, in order to enter the global arena as a competitive player, the company still needs to work on obtaining more patents, improving technical know-how and shaving production cost structure. After much consideration, AUO has decided to postpone its PDP mass production plan and will instead continue to dedicate on research and development. The company remains open to the possibility of bringing PDP back into production, with the improvement of the above.

Looking at the market supply and demand, PDP technology, cost structure, and production factors are facing considerable challenges for both Japanese and Korean suppliers. Moreover, AUO believes that the timing is not suitable for the launching for its PDP production line, but rather continued research and development should be pursued.

AUO is considered to be Taiwan's first company to begin production of PDP modules, as well as the pioneer in Taiwan's first 42-inch and 50-inch PDP modules. The company designed its 50-inch PDP module with many self-developed technologies and world's best contrast ratio of 3500:1. The company has also obtained 38 PDP related patents.