AUO Corporation ("AUO" or the "the Company") (TAIEX: 2409; NYSE: AUO), one of the world's top manufacturers of TFT-LCD panels, announced the signing of a patent assignment agreement with International Business Machines Corp ("IBM") today. This transaction will allow AUO to own hundreds of TFT-LCD related patents developed by IBM, some technologies of which are widely adopted in the industry.

With this agreement, approximately 170 United States patents relating to TFT-LCD technology, together with the counterpart patents in Japan, Korea, Taiwan, and other countries, will be transferred to AUO. The patents cover almost all aspects of key TFT-LCD-related technology, including TFT Array process (TFT structure production), Cell process, such as One Drop Fill Technology, RBG Color Filter, Backlight and TFT driving circuit, among others.

Dr. Fan Luo, AUO 's Chief Technology Officer, stated that IBM, as a pioneer in the TFT-LCD industry, commenced research and development in the TFT-LCD technology since the 1980s, of which originated some fundamental key technologies. After IBM exited from TFT-LCD manufacturing in 2001, it still maintained the TFT-LCD related patents. Some of the patents transferred under this transaction were developed by IBM's research lab in Japan as well as the Yasu manufacturing site, some of which are believed to be widely used in the industry. With the patents assigned, AUO will further strengthen its intellectual property position on both the defensive and offensive aspects.

During the era of Acer Display Technology, AUO has already entered into a technology transfer and license agreement with IBM since 1999, and built Taiwan's first Generation 3.5 TFT-LCD fabrication facility. The successful partnership paved the way for AUO 's growth in the following years and strengthened the company’s TFT-LCD manufacturing process and development. In a few years thereafter, AUO went on to establish Generation 4, Generation 5, and Generation 6 fabrication production facility – all first in Taiwan.

As Taiwan's largest and world's third largest TFT-LCD manufacturer, AU Optronics also leads in Taiwan in the area of intellectual property. As of May 2005, the company owns over 1,100 patents worldwide with over 2,800 patent applications pending. The company is one of the top patent applicants in Taiwan's optoelectronics industry. Moreover, IFI Claims Patents Services placed AUO as the fifth fastest growing patent applicant in the United States in 2004 with a 98% annual increase. With the patents assigned, the number of AUO 's United States patents will increase from about 200 to about 370.

In recognition of the efforts of the company's patent engineers and legal staff, the President of AUO, Mr. HB Chen stated, "the efforts made by the AUO Technology Center in developing technologies in flat panel displays are evident, and we have seen the accomplishment of our patent filings in recent years. The transfer of these important fundamental patents from IBM is the largest number of TFT-LCD related patents acquired in Taiwan. It not only elevates the company's intellectual property position, but also helps us to preserve the interest of our customers."

AU Optronics and IBM also entered into a patent cross license agreement on the same day for a license of the relevant products under other patents owned by both companies.