AU Optronics (AUO) will set up a touch panel business unit under its Consumer Product Display Business Group to tap the fast growing market, focusing on small- to medium-sized touch panels mainly for use in IT products, according to Display Business Operation executive VP Paul Peng at an October 27 investors conference.

AUO has begun production of in-cell touch panels based on its TFT-LCD manufacturing technology, Peng indicated. In addition, AUO will supply on-cell touch panels by transferring excess in-house TFT-LCD capacity and outsourcing, Peng noted. AUO's affiliate Cando will supply AUO with 3.5G color filters.

AUO is installing 3.5G AMOLED manufacturing equipment, with production to begin in the first half of 2011, Peng pointed out. In addition, AUO may use its 4.5G production equipment to make AMOLED panels, Peng indicated.