AUO Buys Stake in Vehicle Computing Company
Taiwan based panel producer AU Optronics (AUOTY) has purchased a 7.7% stake in Sintrones Technology (6680.TT), a company that specializes in vehicle computing systems. Such customized systems can provide a variety of applications ranging from self-driving to vehicle repair systems. These on-board systems manage a number of processes including wireless (LTE), ignition power management, backup battery monitoring, and are based on Intel (INTC) CPUs and graphics, and are also used in railroad and fleet applications.
AUO is expecting that the stake will allow the two companies to develop a tight link between the displays that AUO provides for vehicles and internal networking for AIoV (Automotive Internet of Vehicles), with applications already developed for fleet condition management and networking from “…cloud to ground, software to hardware, and AI to vertical applications”. While LG Display (LPL) and Japan Display (6740.JP) are typically the leaders in the automotive display market, AUO has made a name for itself by producing more specialized panels generally, and has found customers in similar niches that have become high margin drivers for the company. Given expectations for a doubling of the automotive display market size between 2018 ($15b) and 2025 ($30b) and an increase in units from 165m to 350m during the same period, AUO is looking to develop a display product line that is a solution rather than just a display.
Ona more general basis, the automotive display market is a bit less like the consumer electronics market as the lead times for product evaluation and adoption are longer than the half or full year cycles seen in smartphones or similar CE products, but given the more custom nature of automotive displays, the margins are higher than generic panel applications. While LCD displays have been more commonplace for most automotive applications, the ability to develop OLED displays that can be flexible enough to mold to unusual shapes presents a challenge to those who have less emphasis on OLED and more on LCD. That said, one of the most important characteristics of in-vehicle displays is brightness, where LCD displays stand out and the use of mini-LEDs increases contrast, so we expect there will be no clear winner between the two technologies in the automotive space for a few years, giving both time to develop more customized products that fit the ‘connected car’ theme.
AUO is expecting that the stake will allow the two companies to develop a tight link between the displays that AUO provides for vehicles and internal networking for AIoV (Automotive Internet of Vehicles), with applications already developed for fleet condition management and networking from “…cloud to ground, software to hardware, and AI to vertical applications”. While LG Display (LPL) and Japan Display (6740.JP) are typically the leaders in the automotive display market, AUO has made a name for itself by producing more specialized panels generally, and has found customers in similar niches that have become high margin drivers for the company. Given expectations for a doubling of the automotive display market size between 2018 ($15b) and 2025 ($30b) and an increase in units from 165m to 350m during the same period, AUO is looking to develop a display product line that is a solution rather than just a display.
Ona more general basis, the automotive display market is a bit less like the consumer electronics market as the lead times for product evaluation and adoption are longer than the half or full year cycles seen in smartphones or similar CE products, but given the more custom nature of automotive displays, the margins are higher than generic panel applications. While LCD displays have been more commonplace for most automotive applications, the ability to develop OLED displays that can be flexible enough to mold to unusual shapes presents a challenge to those who have less emphasis on OLED and more on LCD. That said, one of the most important characteristics of in-vehicle displays is brightness, where LCD displays stand out and the use of mini-LEDs increases contrast, so we expect there will be no clear winner between the two technologies in the automotive space for a few years, giving both time to develop more customized products that fit the ‘connected car’ theme.
Sintrones - VBOX-3130 In-Vehicle Computer - Source: Sintrones
AUO Digital Display Automotive Mini-LED Console Prototype - Source: AUO
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