AUO has been messaging a focus on value added products. However, its current business is almost entirely LCD panel shipments. This current structure is under attack from an industry increase in LCD capacity. Additionally, AUO has historically underspent on Research and Development (“R&D”) versus its peers. This is apparent on both a percentage of sales and spend per panel.
We analyzed AUO's past three years R&D spend as a percentage of total sales and as a percentage of shipments. The analysis identified that AUO drastically trails its peers on a percentage of sales.
It is well known that AUO does not have Samsung Display's quality. AUO might argue that a percentage of sales metric is incomplete because of differences in product mix.
The remaining Subscriber article details additional metrics to support the case AUO lacks differentiation.