This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear.

The machine-assisted output provided is partly edited and is designed as a guide.:

00:00 Ladies and gentlemen, good afternoon. This is Julia Chao, AU’s IR Officer.

On behalf of the company, I’d like to welcome you to AU Optronics Fourth Quarter 2021 Results Conference. 00:17 Today, we have four Executives present, Paul Peng, Chairman and CEO; Frank Ko, President and COO; James Chen, Senior VP of the Display Strategy Business Group; and Ben Tseng CFO.

00:36 The agenda is as follows. First of all, Ben will go over our fourth quarter results and provide you with guidance for Q1.

Then our Chairman, Paul will have an opening remark. Afterwards, we will have our question-and-answer session.

For the first part of the Q&A, we will address the questions previously collected, then we will open the floor for you to pose more questions. Thank you.

01:09 Now before I turn over to Ben, please allow me to remind you that our forward-looking statements contain risks and uncertainties. Please also spend some time to read the Safe Harbor notice on slide number two.

Ben, please.

01:35 Ladies and gentlemen, good afternoon. I’d like to first go over our Q4 results and I’d be talking about our full year results.

During the fourth quarter, large size products such as TV and PID experiences declines in end market prices, plus material costs persistently increased, our revenue and product were under greater pressure. However, we did our best to offset the impact, we allocated more capacity to stronger demand products and applications, such as commercial notebook, retail manufacturing and medical applications.

02:18 Q4 revenue came in at TWD93 billion, down by 6.1% Q-o-Q. Gross profit was TWD17.6, OP profit, TWD10.3 billion.

Net profit attributable to owners of company was TWD10.7 billion, EBITDA margin, 19.9%. Net non-op income was TWD1.7 billion due to disposal of facilities.

02:52 Next slide. Full year results.

In 2021 on the back of the stay at home trend induced ASP increases across various applications. Our revenue increased Y-o-Y.

Net sales came at TWD317.7 billion, up by TWD99.7 billion Y-o-Y; Gross profit, TWD90.8 billion; Op profit, TWD63 billion; net profit attributable to owners of company was TWD61.3 billion with the EPS of TWD6.55. EBITDA was TWD96.7 billion, margins was above 26%.

ROE for the full year was 29.6%. 03:46 Next slide, balance sheet.

At the end of Q4 cash was TWD79.9 billion, down by TWD8 billion Q-o-Q, mainly due to earlier debt repayment. Debt, long term and term combines lowered to TWD54.7 billion, down by TWD14.9 billion Q-o-Q and 60.

– TWD62.1 billion Y-o-Y. Gearing ratio was negative 10.6%.

Inventory turnover maintained at 42 days. I would like to provide more information on the drop in equity.

Despite a profit in Q4 our equity went down by TWD4.3 billion Q-o-Q to TWD238 billion. This was because in Q4, we obtained an extra 49% stake in the AUO Kunshan to make it our wholly owned subsidiary, for that we paid TWD17.3 billion.

04:59 Before the transaction, the net value of AUO Kunshan was fully accounted for in the consolidated equity of AUO Kunshan, thereby causing the lower equity here. Because of this transaction starting from this year 2022, net profit attributable to owners of the company will fully recognize the P&L of AUO Kunshan using 2021 numbers as a point of reference, a 49% stake and AUO Kunshan will represent TWD22.44 billion in additional profit.

Moreover with 100% stake in AUO Kunshan, we are able to better control the pace of investments to meet our customers demand for high end products and capacity. 6:07 Next slide, cash flow.

In Q4 we generated from operating activities TWD31.4 billion; CapEx was TWD4. – TWD5.4 billion rather, including equity investment of TWD2 billion; financing actively outflow was TWD32.4 billion, including TWD14.9 billion for net changing debt and TWD17.3 billion for the 49% stake in AUO Kunshan.

06:44 Next slide, revenue breakdown. On the back of persistent TV ASP drops, TV’s share further went down to 17%.

Meanwhile, with persistent product mix optimization, the share of notebook, which offers steady profitability sequentially, as a result, mobile, PC and device share increased to 33%. 7:21 Next slide, revenue breakdown by size.

Again, due to TV and other large sized application ASP decreases. 39-inch and above segments lost 5 percentage points in share in total.

10 to 20 inch segment increased by 6 percentage points to 48%, mainly thanks to persistent growth in notebook, large size car displays, retail, manufacture medical displays. 08:01 Next slide, shipments and ASP by area.

Shipments increased slightly by 1% Q-o-Q. Average ASP decreased by 8.6% Q-o-Q.

For our Q1 outlook, due to few working days and slow seasonality, we expect area shipments to be down by mid-single digit percentage points Q-o-Q. Blended ASP denominated in the dollar is expected to be down by low to mid-single digit percentage forms Q-o-Q.

Q1 loading rates will be dynamically adjusted based on market conditions. 09:01 So that was an overview of our Q4 results and guidance for Q1.

Before we proceed with questions-and-answers, Paul will have an opening remark.

09:15 Ladies and gentlemen, friends from the media and analysts, good afternoon. Although, we've already passed the Lunar New Year, I’d still like to wish you happy New Year and best of luck and success in the year of the tiger.

09:38 Today, it is our first time to have a physical investor conference in eight years. Although, we tried worked on providing as much information as we could in the past, but we always found something lacking, because we felt that with face to face meetings there could be more interactions.

Like when I was introduced earlier, you applauded that really make me delighted. So our hope is that to have at least one face to face meeting once every year.

But in two years, we've dealt with great challenges due to the pandemic. So it is especially pleasant to be able to have you here to participate in our investor conference.

10:38 Now let’s look back at 2021, it was a very special year. The first half and second half were extremely different.

Consumer electronics enjoyed strong demand in the first half and lower demand in the second half. But then in the second half, the demand for commercial products spiked, so there was big volatility between the first and the second half posing great challenges to our business.

11:09 But as Ben just shared with you, we had a really fruitful year in 2021. Full year revenue came in at TWD370 billion, up by nearly a TWD100 billion Y-o-Y, registering the highest level since 2015.

Net profit attributable to owners of the company was TWO61.3 billion, an all-time high in our history with an EPS of TWD6.44. Moreover, our ROE reached 29.6%, which is which is – which was also a historic high.

11:56 Last year, the strong performance did not come easy, as we have to juggle many challenges, including the pandemic, component supply crunch, and port congestion issues. There were so many things to handle.

Thanks to our team's fast responsiveness, we have been able to tackle the impact and deliver robust results. Moreover, on the back of value transformation, despite price declines of consumer products, such as TV in the first -- in the second half, we posted stronger ASP performance than our peers.

12:54 We have demonstrated stronger resilience as the society and the market started to give more attention to ESG, I would like to also share with you the achievements that we've made in the ESG aspect. We've actually won 45 awards last year, two in particular our worth mentioning here.

For the 12th year in a row we were included in DJSI, a rare feat in Taiwan. 13:31 Moreover over our MSCI rating was operated from BBB to 1A.

As you have seen earlier in our video, we have made some progress in Industry 4.0 and sustainability. We have been certified as a Lighthouse Factory.

These achievements show that our multi-year efforts have paid off. Now what about this year?

TV prices saw significant corrections in the second half last year. The corrections have gradually abated recently, because of several reasons.

First of all, there have been big corrections already. Secondly, market inventory levels are quite healthy at the moment as we are in a slower season.

And panel inventory built up is less aggressive than the first half of last year. So TV price drop is already easing.

15:03 PC or IT applications, such as my monitor or notebook will likely experience some changes, some corrections. Because the stay-at-home economy induced by COVID, people have gradually grown used to remote learning and remote working for which we require notebooks and monitors to support work, and these products have enjoyed big growth.

15:34 Last year registered a PC shipment peak in several years. For two years growth was in the double digit range, with last year being peak in particular.

This year shipments will likely be flat or up slightly. This year consumer products will probably see weaker demand, but on the back of the back to office demand, commercial segments still are enjoying strong growth.

16:19 AU has built a strong position in notebook products, we have low temporarily which is really efficient in power consumption and we also have gaming, professional use curve monitor, and high refresh rate products. These are niche products which we have really good shipments momentum.

Moreover, we have launched many LED models and we have been working with customers on co-marketing, which also helped us to boost shipment momentum. 17:04 We expect that IT segments will have more stable situation, and the growth will be less significant as in the past two years.

While TV market is slowing down, some peers have shifted their capacity toward making more and IT products, especially large sized monitors, commodity monitors. There have been quite some pressure on the market, but AI is less affected, because we have been more focused on premium models.

17:45 But what's worth noting is that, the component supply crunch is still persistent. Last year, the shortage for automotive chips were especially in short, causing a car sales to drop.

This year, the demand may still be outstrip supply and the shortage will be particularly stringent in some process. Now what about the panel industry.

When some panel makers shift from making TVs to ITs, they will be acquiring more drivers, but they don't have sufficient supply relationships to allow them to translate their new capacity into effective output. 18:49 AUO has a long term relationship with our customer, suppliers and expertise in niche products and technologies.

So we have an advantage here. Today, we have already been engaging customers as suppliers on their orders and also on material procurement plans.

So, we believe we will be more resilient to the market crunch. 19:19 In addition, we continue to ramp up our capacity in the Kunshan app.

And as the capacity gradually comes online, we will incrementally increase our portion in premium models. This also goes in alignment with our go premium strategy.

Last year, because of the chip component shortage, the car segment has been affected negatively, demand was weaker. This year, while the supply situation will improve slightly for automotive chips, the rise of electric vehicles would also translate into a different kind of requirement for panels.

There are several different requirements. First of all, the picture quality requirement is different and power consumption is also different.

20:26 When it comes to car displays, low temp capacity is used. And for the past few years, there have been quite some capacity ramps, there will be more volume in the next few years.

Moreover, as surplus driving becomes a new trend, the demand will be higher for picture quality and large size specifications. 20:55 AU has been a strong contender in the car display market for a long time and we've have been working with nature car makers for a long time.

We will capture this opportunity by leveraging our strong market position to provide more free-form full lamination products in hopes of extending the values AUO. 21:30 Currently, we've been engaging an increasing number of customers on new projects.

In the post pandemic era, the contact less demand is on the rise. For a lot of business activities people are asking for non-contact interactions.

To do so, displays will be required, giving rise to higher demand for storefront, medical, industrial, commercial and factory use applications. This is why we've been emphasizing on our push tour commercial applications to meet the demand.

Last year, we spun off AU Display Plus or ADP in hopes of exploring more business opportunities in verticals by using the advantages of ADP. With the spin off, we now have more flexibility and agility to help foster the development of field applications.

22:56 In recent years, our revenue coming from new business and field economy applications group have been growing in several times. Although the base is still small, but the growth is quite significant.

So this signifies the other pillar of biaxial transformation, the vertical part of it. 23:26 As for 2022 our view about supply demand is that, we believe we will be returning to seasonality dictating demand.

The COVID pandemic has disrupted supply and demand for two years. Two years ago, we didn't know how to tackle the sudden outbreak.

Last year, the stay at home economy gave rise to demand of some applications or accelerated the demand for some applications. This year, people's life is going to be returning to normal and so as commercial activities.

Therefore, the panel industry will be returning to seasonality. 24:32 Unless there is any of sudden major incident, the market will be more seasonally fluctuating.

But there are few things that we need to pay attention to. One is inflation.

The U.S. stock market was very volatile these two days, due to over -- higher than expected inflation.

Raw material prices continue to spike. And for AUO, we would need to watch closely whether the increases in product pricing would cannibalize people demand for non-life necessity grocery and products.

25:25 As projected that the situation will be less pronounced in the second quarter, then we won't have to worry too much. Also geopolitical risk such as the conflicts between Ukraine and Russia is another a potential factor that could rattled the entire global economy and also from last year, the end of last year to the early -- to the beginning of this year, projections for the global economic outlook have been adjusted downward.

There's also another aspect that we need to watch closely. That is current emissions reduction or carbon neutrality.

Near zero carbon mission has become action, real action, not just lip service. 26:22 There have been goals set for 2025, 2030 or 2050.

These initiatives or targets will be very important for enterprises. Emissions reduction initiatives will entail higher costs or enterprises, because fossils were very inexpensive, but they created huge emissions.

Alternative resources are higher cost and they will likely cause costs to increase from materials to products, but of course, we still need to work on finding new opportunities. In the future, there will be new opportunity coming from these initiatives that we can capture.

27:20 In terms of action against climate change, AU has been taking steady steps towards counter climate change. In 2021, we were joined by several other ICT companies to launch the Taiwan Climate partnership.

Moreover, we have vouched to have near zero carbon emission by 2050 and to reach our E-100 target. Again, this will incur a higher cost.

But we have to do our best to deal with the impact. 28:05 So I've talked about last year and outlook for this year.

Then I do a quick summary. We have been working very hard on actual transformation strategy implementation for these years.

Our push to strengthen product values by utilizing premium capacity, products and technologies is bearing fruits. With the premium business today accounting for half of our revenue, because of this, we have been able to be less susceptible to market volatility.

But we still need to do more and do better. 29:03 While near zero carbon emission initiatives will incur higher operating cost, we need to identify new opportunities in the market.

For example, through our smart manufacturing and water management subsidiaries, we hope we can capture valuable opportunities. Moreover, we need to also focus on smart applications and smartphones fields, including the five major fields of smart healthcare, smart education, manufacturing and retail, and traffic and transportation.

We have to build comprehensive ecosystems to make our values scope beyond just panel business. 29:50 Our hope is that, revenue contribution of our non- pure display business will be more meaningful.

And also hope that we can be more resilient against cyclicity. Our expectation is for AUO to become a strong company that is steadily profitable as well as responsible corporate citizen that is able to reduce carbon ambitious to be near zero.

These are our long term goals. 30:32 I'm so delighted to have this opportunity to share with you our prospects and our developments.

We haven’t met face-to-face for a long time, so please forgive me for taking such a long time to have this opening remark. I hope that we can help you better understand our business and our performance.

Thank you.

30:58 Thank you, Paul. Now we will have our question-and-session for the first part, we will address the questions that we collected.

The first group of questions are about market updates and outlook. What is our view on the 2022 global panels supply and demand.

Frank, would you please take this one?

31:26 Ladies and gentlemen, good afternoon. This year in particular, first half supply and demand, this is our view.

Let me talk about supply side first. The panel industry has been going through structural changes from the perspective of capacity availability, the ramp ups have been slowing down these two years and slowdown will continue this year.

At the same time, the supply chain has been going through some challenges, especially shortages of component supply, new capacity extension will likely be crucial to this year. 32:18 As for the demand side.

This year will be different from the previous two years, which were stimulated by the COVID related demand, This year, the supply and demand will be more seasonality determined. But before the short term, consumer and commercial applications will have different demand.

There are still the shortages for components and the transportation backlogs. 32:57 Brands are going to use their key compliments on making premium and higher priced products.

And consumers have also changed their behaviors, shifting more focus to higher end and premium products as well. These new trends are now being reflected on the higher demand for commercial gaming and car applications.

These are the areas that AUO has been working on, particularly for a very long time. 33:32 So as the trend for bigger size screens and premium products AUO will stand at a advantage.

Looking ahead at the first quarter, even the store demand for customer products in Q1 and the fact that we will be having a few working days in Q1. Q1 will likely be seasonally soft.

Thank you.

34:14 The second question is about TV sell through. What is the TV sell through in different markets around the world?

And also, could we provide a demand outlook for the first quarter? Also, as cargo traffic congestion takes a toll on shipments, could you also talk about inventory levels and the prospects?

34:48 In Q4 TV enjoyed strong demand, given the high seasonality. Let's look at major markets.

North America, in particular, saw a large size high end TV sets priced over $1,500 share growing from 3% to 5% as a total the share. As the share of the total sales in 2021, this represented a group of 40% Y-o-Y.

Also, there has been size migration, in Mainland China, 60 inch and above TV set sales accounted for 40% of the sales registered during the 11 Single Day Sales festival. 35:51 And also during November, the average size sold was as highest as 58 inch.

So this represents the migration toward higher end and premium products. However, emerging markets were more severely affected by this pandemic, pushing down the demand.

However, as vaccination rate continues to pick up, economic recovery can be expected. 36:31 About inventory against the backdrop of logistic problems around the row including poor congestion, shortages of cargo, ships and containers.

In advance of the high season and after the high season up until now, which is a low season. Inventory levels at channels have been healthy.

However, in transit inventory, across applications is relatively higher today. And the excess cargo backlogs of course may still take some time to digest.

So logistic problems may still linger and we need to pay close attention to how long the issues will continue.

37:35 Thank you, Frank. About financial related questions in Q4, our loading rates were more than 95%.

In Q1 we will make dynamic adjustments based on market conditions. Depreciation and amortization amount was TWD8.2 billion in Q4 and TWD33.7 billion in the entire year.

The amount for 2022 is expected to be TWD33.5 billion. CapEx in Q4 was TWD5.4 billion and TWD17 billion for 2021 full years.

Some of the payments will be delayed into this year. 38:21 For 2022, the CapEx will be TWD45 billion, which will be slightly higher from previous years.

Besides the delayed payments to be made, we will also be adding some CapEx, mainly CapEx for capacity ramps in Gen 8.5 and Gen 6 in Taiwan and the new Gen 6 LTPS line in Kunshan. 38:59 Also yesterday, we passed a resolution to have another TWD28 billion CapEx at the Board of Director Meeting yesterday.

TWD5 billion of that amount will be made this year. Also yesterday, the TWS28 billion CapEx will mainly be used in holy fab in Zhongku.

TWD20 billion plus will be used to build a Gen 8.5 fab including land purchase and electricity and engineering purchases, but the cost for equipment is not included in the CapEx. For the machine purchases, we will budget CapEx in incremental phases based on market conditions.

39:53 The next group of questions are about AUOs major applications and technologies. Last year market demand fluctuate drastically, the second half saw the demand shipping from customer to commercial applications.

What was the impact on AUO? And also, as you continues to push for premium products, could you just please provide an overview on AUOs performance in 2021 and outlook in 2022.

40:33 Ladies and gentlemen good afternoon. I would like to share with you our perspective on our outlook for key products and technologies.

As Paul just shared with you, Last year in the second half as reopening takes -- took place around the world, people started to go out more often and business activates resumed to normal. Some traveling were taking place as well, consumer products, especially TV sets, saw weakening demand.

41:20 At the same time, as companies resume normal operation, commercial and store front and factory equipment require new investments, pushing up demand. So within a very short period of time just within a quarter, we had the downturn of consumer products and uptick of industrial and commercial products.

While at the same time, they were the challenges of component supply crunch, IC chip shortage and shipping container shortages. All of these challenges occurred just within that quarter.

So the second half was particularly challenging. 42:09 At AUO, we have a very comprehensive product lineup up.

We are particularly strong in our high end consumer products and industrial, commercial and automotive displays. We have a very even distributed and comprehensive lineup up.

Within each segment, we have leading position in the market. 42:39 Throughout market changes and fluctuations, we are able to dynamically adjust across our product lines to deliver strong results.

During end a year, there were several bright spots that are worth mentioning here. Despite fierce market competition, we maintained leadership in 85 inch TV panels and enjoyed relatively stable ASPs.

Competition in the monitor segment was intensifying, but we maintained market leadership in gaming and ultra-large size curve panels. This benefited our customers because we are able to meeting their diversion requirements.

43:42 We are also the number one leader in super low power consumption, low temp notebook computers. Low temp technologies fits the need for low power use and low emission products.

So you has decided to expand our capacity for LTPS.11 For car displays and industrial displays, these were the two segments that saw some shifts in demand, but they have achieved high double digit growth. In 2022 the demand for car displays is quite strong, but it was capped by components supply crunch last year.

Currently, challenges were are being addressed gradually. Last year, the shipment was only less than 80 units, while the market has a capacity of 90 million units.

So there is a big room for growth, in particular EV sales doubled. 45:05 AO has been working on the car display segment for more than ten years, we have been among the top two providers and have built long term relationships with major carmakers with EV, low power consumption panels are essential with our super low power consumption panel display technology we have been able to secure a leadership in the market.

And currently, we're seeing demand growing nicely. We expect that for the next few years, car display will register our double digit growth.

And we will also invest more resources in the car display segment. 45:58 As for industrial and commercial display segments, as Paul said, upon reopening of economies, people are gradually returning to normal life.

However, people still try to avoid contacts with each other. That is why non-contact or content less interactions have taken shape.

So the demand for touch or integrated panels in various applications, including medical, retail and other signage has all the strong demand. 46:39 On the back of recovering business activities amid reopening of economies governments will be investing in more infrastructure projects, leading to more opportunities for panel makers.

AU is the number one provider in industrial displays. So we stand at a better chance at capturing these opportunities.

47:14 With regard to TV, we will continue to focus on 8K SLS, super large sized panels. And also, we will be investing more resources in developing next generation technologies such as micro LED.

In terms of IT, we have built a very strong position in IT segments. We have a full lineup.

And currently, we have the number one position in the low power consumption notebook panels. 47:55 In addition, we continue to invest in the development of low temp technology as the world is looking for lower power consumption and lower carbon emissions, we believe there will be nice opportunities in these areas.

So what we will do is that, we will look for our niche opportunities and also areas where we stand advantages to push for building a stronger customer base and to land more opportunities. 48:35 In businesses where we have stronger marketing power, we will especially strengthen our push.

48:45 Thank you. Ladies gentlemen, will now open the floor for questions.

To ensure equal opportunity for each participant, please reminded to limit the number of questions to three per person and please state them all at once. Before you start to raise questions, please announce your name and your affiliation.

Jerry, please.

49:19 Thank you. This is Jerry from Credit Suisse.

Thank you for hosting this physical meeting. You mentioned that you passed a new CapEx plan yesterday.

Could you let us know what this fab will focus on? What kind of products?

when will it be ramped? And what is the scale?

You only spent 500 – TWD5 billion on land purchases and actual mechanics. And does the twenty five billion include the expenses for equipment purchases.

If not what will it be used on? That is the first question.

Also, my second question is that, Paul and Frank both mentioned that capacity expansion will be curtailed and the space is also slowing down. But if look at the next one or two years, does that mean the supply and demand will be toward parity or a more balanced stage.

50:47 The next question is about notebook. Recently, there have been an increase in -- there has been an increase in number of notebooks with an asset ratio of 16/10 rather 16/9.

Although the change doesn't seem much, but based on my own calculation, that means an extra 10% of area will be needed. From your perspective, does this kind of asset ratio will be the norm in the future.

And what is the code challenge or advantage of AUO?

51:34 Thank you, Jerry for your questions. I will take the first and second one and I will have James to address the last question.

51:45 In Taiwan, our fab establishment, if you recall, was done between 2008 and 2010. The last fab that we build in Taiwan was the amorphous fab in 2010.

We didn't really feel that fab up until last year, we filled it up in four phases. This means that the fab that was built 14 years ago was felt up in different phases.

This is because that we wanted to make sure that our technology could really match the demand of our customers. During these years, we only had another one.

a Gen six fab in Kunshan that was built. 52:42 This time around because we believe that high end IT products, especially notebook and monitors would require a bigger investment that is why we will have to expand our market shares and our positioning in the premium models.

So the new fab that is going to be built will be mainly focused on producing IT products. The budget that was passed was only for land purchases and electro mechanics because the buildup will take a long time.

Mass production will not happen until 2025. 53:36 And we haven't budgeted for equipment purchases, which will take place in several phases.

We will probably start to budget for equipment CapEx 2023. Today a Gen 8.6 or 8.5 Fab requires an investment in amount of about TWD100 billion to TWD150 billion depending on capacity needs, and machines.

This is the range, going forward, we will have to take incremental steps in fitting the fab with machines. 54:24 Currently, we don't have a set schedule for how long the moving will take, but based on our previous Gen 8.5 fab, which was started with mass production in 2010.

And we didn't really filled it up with equipment until last year. That is because we have been prudently invested in smart investment and adding the capacity that is really needed.

55:04 The world's capacity ramp ups have been most concentrated during 2014 to 2019, especially in China. Since the US-China trade war in 2018, what happens is that, the Chinese government has gradually shifted its subsidies and it’s support to the semiconductor industry, these two years where the pandemic was really rampaging around the world.

The Chinese government has put a lot more physical money into pandemic prevention and household support. Thereby causing LCD production capacity ramp ups to slowdown down.

56:00 In previous investor conferences, we have shared with you that this industry has been through some structural changes. Structural changes are different from geographical changes.

In the panel industry, the major producing countries are Taiwan, South Korea and then Japan, but today, Japan has already existed from the market and Korean panel are also winding down their LCD production. 56:33 With the Mainland Chinese panel still growing in scale.

So China will account for probably 60% plus for the total capacity and Taiwan is only accounting for more than 20%. And besides geopolitical -- geographical changes there are also structural changes going on in the panel industry.

The Chinese panel makers are slowing down their investments with dwindling government subsidies. So the panel industry is going to be more market oriented.

57:11 Drastic supply and demand mismatch will likely be improved. Of course, there will still be some seasonal or incidents changes.

But the drastic volatility that has taken place for the past 20 years may be gone. 57:39 Jim, would you please answer the last one?

57:42 Thank you, Jerry for your questions. The 16/10 conversion asset ratio is in defined trend because for the past two years people have been working at home and people require an extra notebook or monitor, and people have realized that the aspirational of 16/9 is not as efficient as 16/10, because with 16/9 you have to up and down frequency, and the screen itself is not big enough.

If you're working on your notebook, you still have extra space on your panel that is not a display area. But today people are more favorable with full screen displays, which provide more information with one screen.

58:41 And this demand has taken shape. Take AUO for example, new projects that we are working on and our engaging with engagements are for panels with aspirational of 16/10 and we expect that the shipments will increase in volumes.

And the growth will be quite strong this year and also the next. In the past, most of the fabs were invested for making TV panels and TVs have a form factor of 16/9, when we convert to 16/10 asset ratio and sometimes cutting cannot be as efficient.

59:37 But it is a requirement, if it want to really meet marketing demand, we have to be able to switch to 16/10. Fortunately, AU has many fabs many lines, we are able to find the fabs, the lines that can offer the most appropriate and most efficient cut to meet the customer demand.

60:08 I would also like to respond to Jerry’s question on the CapEx amount. We announced the plan of TWD28 billion CapEx.

Most of the money will go into buying the land and electro mechanical equipment. Because it is a full field project, so the investment amount will be bigger.

60:31 Do we have any other questions from the floor? If there are no other questions, we would like to conclude today's investor conference.

Thank you for participation. We'll see you next quarter online.