TAIPEI Shares in Taiwan's AU Optronics Corp jumped as much as 6 percent on Thursday after a report that the world's No.4 LCD maker has won an order to provide flat panel screens for Apple Inc's hot-selling iPad 2 tablet.
Taiwan's Economic Daily News, citing no sources for its information, said the panels' selling price will be three to four times more than regular panels of the same size, giving a big boost to AU's profit.
AU could ship 30 million of the screens in a year, it said. The order will take up over half the capacity of its plant in Taichung, central Taiwan.
AU declined to comment.
Analysts however cast doubt on the ability of AU to produce iPad 2 screens, which are based on a different technology than it currently uses and would require a patent authorization that AU does not have.
"I think the credibility of this news is only at 30-40 percent, mainly because of the patent authorization for the technology," said Wayne Cheng, an analyst of Primasia Securities.
If AU, which is currently using MVA technology for its panels, is to make the panels for the iPad 2, it first needs to get authorization for the IPS technology from patent holders Hitachi and Sharp of Japan and South Korea's LG Display, according to analysts.
Other companies that use IPS include Samsung and Taiwan's Chimei Innolux.
MVA and IPS refer to technologies for viewing angles and color reproduction in liquid crystal displays.
"It takes at least six months to one year to apply for the patent authorization, and it also takes time to convert a fab to use the new technology," said an analyst from a foreign brokerage, who asked not to be identified as he is not authorized to speak to media.
"So it's quite impossible for AU to produce for iPad 2 this year."
Analysts also think it is impossible for AU to win over half of iPad 2 orders. Sales of the new tablet this year are seen at around 50 million units.
"The shipment figure also looks bloated. Apple always diversifies its suppliers to avoid the over-concentration risk," Cheng said.
AU shares were up 4.7 percent at T$25.65 at 0258 GMT after having risen to as high as T$26.05.
Analysts forecast some 1 million iPad 2s may have been sold in the first weekend of its launch in the United States on March 11. The device went on sale in 25 markets in Europe, Australia and elsewhere on March 25, drawing long queues outside stores.
(Reporting by Jonathan Standing and Clare Jim)