LCD panel maker AU Optronics (AUO) has adjusted its capex for 2011 to around NT$60 billion (US$1.99 billion), from the original figure of NT$90-95 billion. With China-based peers aggressively expanding capacity expansion, AUO expects its capex in 2012 to be lower than NT$40 billion.

AUO's lowered capex for 2012 mainly reflects the world's worsening economic conditions, said the company's acting president Max Cheng. The company has not seen signs of recovery after three quarters of weak demand, he noted.

AUO CFO Andy Yang added that the 2012 capex will cover a payment for a Singapore plant and the construction cost of a Kunshan plant in China. The two will total under NT$20 billion, he said.

The 2012 capex will also cover development of new technologies, such as AHVA (advanced hyper-viewing angle) displays, 3D displays, touch panels and AMOLED, which may exceed NT$20 billion, Yang said.

AUO has reported net loss of NT$15.8 billion for the thrid quarter, suffering losses for four consecutive quarters. Loss is expected to continue in the fourth quarter, market observers said.

AUO vice president Paul Peng said that although construction on its 8.5G plant in Kunshan, China will continue as planned, the factory will not begin operation until after 2013.

Responding to China-based BOE Technology and China Star Optoelectronics Technology (CSOT) starting volume production at their 8.5G plants, Yang said China panel makers are still lagging behind their Taiwan and Korea competitors in terms of technology.

Yang said China's panel makers are not too much of a threat for Taiwan players in the coming year, but Taiwan makers have to gear up development of advanced technologies and high-end products.