AU Optronics Corp (AUO) and Quanta Display Inc (QDI) will merge after the deal was approved by the Fair Trade Commission and by shareholders from each firm. After a little while, 21% of the large-sized (10 inch +) TFT-LCD market will be controlled by the new born. Also, more than 25% of the notebook panel market will belong to them, according to historical sales data Display Search.

Furthermore, the firm will have a spot in the top 3, based on unit sales, in several other areas, as LCD TV panels, LCD monitor panels and digital camera LCD displays. Previously, AUO had ranked amongst the top 5 global manufacturers in these sectors. The display market is dominated by major manufacturers like Samsung and Sharp, so analysts said that a union between Taiwan's LCD makers was inevitable.

The new company will employ 42.000 people worldwide. Preparing for this, QDI laid off 1400 employees last month (that's 10% of the total number of people who worked for it). In the increasingly competitive display market, LCD makers that lack advanced technology or economies of scale have suffered negative profit margins and struggled to survive.

AU Optronics executives recently declared that they are slowing down plans to introduce more advanced LCD technology, and will instead focus on cutting production costs. The manufacturer reported revenues of $703 million last month, an increase of 15.7% compared to a year earlier.

AU Optronics did not commercialize LCD panels under its own name, but supplied them to other manufacturers which incorporated them into products. AU Optronics' major customers have included BenQ, HP, Wistron, Philips and Toshiba. Like AU Optronics, Benq and Wistron are affiliated with Taiwan's giant Acer group.

“AU Optronics and Quanta Display complement one another in their strengths, ushering in the arrival of a new era. The post-merger AU Optronics will be better able to utilise its resources and R&D talent to strengthen its leadership in the global TFT-LCD industry", said AU Optronics chairman K. Y. Lee.