AUO Corporation ( " AUO " or the " Company " ) ( TAIEX : 2409 ; NYSE : AUO ) today held a meeting of the Board of Directors and Supervisors, at which the Board approved an investment plan of NT$35 billion in AUO’s Taichung Site for a new TFT-LCD fabrication facility (" fab " ). This new fab, located in Taiwan’s Taichung TFT-LCD cluster, will deploy a glass substrates size of 1,950 mm x 2,250 mm (" G7.5 ") with monthly input capacity of 30,000 substrates.

Mr. KY Lee, Chairman of AUO Corporation, indicated that construction of the building for the new fab is already completed. After thorough analysis and evaluation, the Company concluded an investment decision in a G7.5 facility to target the HDTV market segment that is larger than 40 inches and is ideal for home theater solutions. AUO's G7.5 substrate size of 1,950 mm x 2,250 mm, provides efficient production of 42 " wide ( eight panels ) and 47 " wide ( six panels ) TFT-LCD panels. This large glass substrate can also support three 56 " wide TFT-LCD panels. AUO currently plans for an equipment move-in schedule for the second quarter of 2006, and expects to commence commercial production in the fourth quarter of 2006.

" Being a world class TFT-LCD manufacturer with a complete product portfolio, we have the competitive advantage to support various customers' needs with cost-competitive products from a wide range of production fabs. In addition to maintaining AUO's lead in the LCD TV market, the addition of this G7.5 fab will further enhance AUO's competitiveness in terms of production flexibility and scale. " Added Mr. HB Chen, President of AUO Corporation

Dr. Hui Hsiung, Executive Vice President of AUO, commented that AUO's strategy has always been to optimize the time migrating into the next generation production, while maintaining a Top 3 position globally. Dr. Hsiung believes that significant cost reduction in LCD TV panels should be achieved in 2005 as more G6 capacity enters into mass production phase. The more attractive prices would be able to stimulate higher consumer demand for LCD TV. AUO currently offers a complete LCD TV panel product line (ranging from 14 " to 46 " wide) and is able to provide fast response time solution that is capable of displaying fast moving picture (less than 5ms) with excellent picture quality improvement technology. AUO has lined up a premium list LCD TV clienteles which include some global top-10 TV brand names in Europe, Korea, and Japan, among others. Dr. Hsiung says the timely production of G7.5 fab will further enhance comprehensiveness of AUO's LCD TV portfolio that is needed to support global TV makers'campaign to meet potential demand from consumers.