By Charles Annis – Vice President, Manufacturing Research, DisplaySearch

On May 27, AUO and SunPower announced they are entering into 50/50 joint venture to construct and operate SunPower’s Fab 3 that is currently building built in Malaysia. The factory will have 1.4 GW of cell capacity when fully ramped in 2014.

When asked specifically what sort of manufacturing benefits they might get from AUO, SunPower management suggested automation experience, yield improvements, equipment effectiveness and lower costs from scale of purchases. Even so, for SunPower the benefits are clearly and mainly financial. Essentially, SunPower will get the same volume of production but with less cash while ramping capacity and reducing costs faster.

During SunPower’s Q&A session, one caller inquired something along the lines of, “AUO is paying 50% of the costs and only getting 20% of the output in three years, why is this a good deal for them?” And that kind of implies the perspective of the solar industry; the deal makes SunPower more cost competitive, but isn’t that big of deal in terms of changing market position.

But from the perspective of the LCD industry, the deal is significant. It jump-starts AUO’s diversification strategy away from the maturing FPD industry and into the forecast long-term growth market of PV. Other top LCD makers are surely watching this move with great interest while carefully planning their own solar strategies.

This is taken from an article in the DisplaySearch Monitor, which has more detailed coverage of the AUO/SunPower joint venture. The DisplaySearch Quarterly PV Cell Capacity Database & Trends Report has our latest information cell capacity and CapEx forecast.