Display technology from AU Optronics stolen and given to Chinese firm, alleges investigation

Former executives with AU Optronics allegedly leaked trade secrets from the company, according to a Taiwan investigation

By , IDG News Service |  Hardware

An investigation by Taiwan's government has concluded that two former executives with display maker AU Optronics allegedly stole technology from the company and supplied it to rival Chinese firm TCL.

The two former executives, who now work at TCL, leaked the sensitive technology to the Chinese company, according to evidence said to have been found by Taiwan's Ministry of Justice Investigation Bureau (MJIB). A spokesman for the bureau said on Tuesday the investigation is nearly over and the findings will be passed over to prosecutors, who will determine how to proceed.

Taiwan-based AU Optronics is a supplier for companies including Acer, HTC, and Apple. Among the trade secrets stolen is its AMOLED (active-matrix organic light-emitting diode) screen technology, which the bureau noted was sensitive and would damage Taiwan's panel industry if leaked.

The two former executives, surnamed Li and Wang, worked in developing panels and OLED technology for AU Optronics, but were lured away with new positions from TCL's China Star Optoelectronics Technology business unit, which also builds displays, according to MJIB. In exchange for supplying the technology, both Li and Wang were also compensated with annual salaries of over US$1 million.

The MJIB interviewed the two former executives on Sept. 26, and searched their homes while also taking away their laptops as possible evidence.

AU Optronics said in a statement on Monday, "The behavior of the former executives who left the company, not only harms the progress made from industry research, but also severely influences the fair competition in the industry." The company added that it has filed suit on the matter in a Taiwanese court.

TCL did not immediately respond for comment. The Chinese company is a major producer of TVs, household appliances and mobile phones.

The main customer base of TCL's China Star Optoelectronics is in mainland China, said Nick Jiang, an analyst with research firm IHS iSuppli. While China Star Optoelectronics has yet to reach the influence of international rivals AU Optronics, Samsung SDI and LG Display, the company is gradually building up the technology to compete on a wider-scale.

Currently, China Star Optoelectronics only builds displays for TVs, but has plans to manufacture displays for handsets in the future, Jiang added.

The alleged leak of AU Optronics' technology is especially sensitive, given that Taiwan wants to become a larger producer of AMOLED screens. Currently Samsung in South Korea is the leading vendor of AMOLED screens that have also been used in the company's Galaxy S line of smartphones.

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