Shares of display panel builder AU Optronics
Here, have a sackful of salt.
There are many reasons why this rumor doesn't hold water:
- AU Optronics doesn't have access to the LCD panel technology used in the iPad, and industry analysts say that it takes as much as six months just to sign a contract for the patents in question. Samsung obviously already cleared that hurdle, while LG is one of the core patent owners alongside Sharp and Hitachi
- Let's say AU magically got the rights -- then it's time to convert production lines to a very different technology. That takes time too, and brand-new production facilities based on unfamiliar technologies aren't known for cranking out copious volumes of high-quality product from Day One. By the time AU gets its production lines up and running, supplies out of Japan may very well have normalized again.
- So what if Apple just wants whatever panels AU Optronics can produce in its existing factories? Yeah, and I have this eight-mile bridge for sale in Arizona if you believe that one. HTC and Motorola Mobility
(NYSE: MMI)may have switched to a different panel type when OLED screen supplies became a bottleneck for their high-end phones last year, but Steve Jobs still hasn't released the white iPhone 4 because the button in the front is the wrong shade of white and other factors which would prove trivial for other companies. It's Steve's way or the highway, even if customers have to wait longer for their iPads.
If there's any order shifting at all, it would be a redistribution between the existing suppliers or perhaps a helping hand from Sharp and Hitachi -- assuming that their factories in Japan are doing OK. So AU's jump today should be very temporary.
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