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AU Optronics

Saving Water Helps Environment – and Bottom Line


To cope with Taiwan's uncertain water supply, AU Optronics has made water conservation an integral part of its flat panel fabs. How have they approached the problem and what's the real payoff?



Saving Water Helps Environment – and Bottom Line

By Benjamin Chiang
From CommonWealth Magazine (vol. 428 )

AU Optronics, Taiwan's leading producer of TFT-LCD flat panels, opened its 8.5 generation fab in the Longtan Science Park to reporters for the first time ever on August 4. Taiwan was suffering from a serious drought, and the Shimen and Tsengwen reservoirs, the main sources of water in northern and southern Taiwan, respectively, were at dangerously low levels.

But what the media focused on was how AUO was dealing with water shortages, and persistently questioned the company on the issue.

Long seen as a major consumer of water, AUO has waged an aggressive campaign in recent years to conserve the precious resource. Over the past six years, the company has been commended five times by the Water Resources Agency as an outstanding water-saving organization, making it the most honored water-saving flat panel maker in the country.

"AUO's plant in the Longtan Science Park alone saves enough water in a year to fill the Baoshan Reservoir 2.75 times," says Frank Niu, director of AUO's Risk and ESH Management Division.

"AUO made water saving a key part of the design process from the time the factory complex was first designed," adds AUO chairman K.Y. Lee, and it has invested another NT$2 billion in a water recycling system at its Taichung base.

In 2008, AUO saved a total of 24 million cubic meters of water, about one-eighth of the storage capacity of Shimen Reservoir. "We save NT$300 million in water fees annually. We conserve water and protect the environment," Niu boasts.

Playing for Keeps

Flat panel and semiconductor plants are listed as big industrial water users in Taiwan, but at AUO's 8.5 fab in the Taichung Science Park, its water recycling rate is 90 percent, on a par with the top performers in the world. It saves 3 million cubic meters of water a year, equal to the water contained in 1,430 standard-size swimming pools.

This is because AUO has made conserving energy and water one of its major management objectives.

In January 2008 AUO president and CEO L.J. Chen underscored his company's environmental commitment with a set of green targets he dubbed "877" – by 2010 the company aims to achieve an 80-percent resource recycling and reuse rate, a 70-percent reduction in greenhouse gas emissions and a 70-percent reduction in water use, relative to 2004 levels.

"It looks like an impossible goal, but we're confident we can reach it," Chairman Lee stresses.

In order to make saving water more than a slogan, AUO has laid out specific water-conservation objectives. What remains is following through over the long term.

40,000 Sherlock Holmeses

"AUO relies on tight organizational operation to save water, rather than giving each plant the freedom to do what it wants," Niu explains. The company has established an internal "green manufacturing" committee, chaired by a top manufacturing executive. The company's 14 flat panel factories in Taiwan and module plants in China's Suzhou and Xiamen select manufacturing and plant managers to attend monthly committee meetings that focus on water saving issues.

In setting water saving goals and policies, "we absolutely cannot use a blanket standard. We should differentiate between product lines and factories when planning," stresses Niu, who has a master's in environmental engineering from Northwestern University.

AUO has built a unique internal water-conservation Cross Function Team (CFT), composed of executives from its different factories and business lines, to harness the company's collective wisdom and develop new methods to save water. They test each new innovation at one factory first, and if it is successful, immediately apply it at the company's other facilities in Taiwan and China.

This complete commitment to saving water by all of AUO's employees has paid huge dividends in the short span of two years. The average amount of water used per square meter of flat panel produced went from 0.8 cubic meters in 2007 to 0.7 cubic meters in 2008, and AUO hopes to push the average lower in 2009 to 0.6 cubic meters, which would set a new low.

Another key behind AUO's ability to reduce water usage is its careful evaluation of even the smallest production unit or component to root out even the smallest possible source of problems on every production line.

"We continuously look deeper into the production process to analyze what is consuming the most water or electricity and what factory is using the most water. We even analyze which machine is using the most water and search to find which part creates the greatest need for water," says CEO Chen in breaking down the process.

To enhance AUO's water-saving performance, the company's 40,000 employees have all become Sherlock Holmes-like detectives, always ready to pounce on water-wasting processes within their areas of responsibility and correct them.

In any TFT-LCD panel factory, cleaning the glass substrate at every stage of the production process consumes more water than any other task, but the composition of the wastewater at each stage is different. It would normally all be collected by a central wastewater treatment plant to be recycled, a process that not only wastes substantial amounts of energy but also leads to a low recycling rate and high costs, because the different kinds of wastewater are treated together.

But AUO spent nearly a year recently to develop the world's first Water Inter-use System (WIS) to purify and save water as part of the production process. The company analyzed the wastewater produced at every stage of production to determine in what other processes it could be used without raising their products' defect rate. 

AUO then reconfigured its production line. Through its plant management system, it first screens water quality and then directs it to an appropriate process that can reuse the water without requiring additional treatment. The system enables the company to recycle 85 percent to 90 percent of the water it uses.

This water-saving campaign is now in its next phase of improvement.

"In the past we emphasized the ‘right spec' for the production process. Now we've raised that to the ‘best spec,'" Niu says.

A War on Wasted Water

AUO's conservation campaign is not limited to its own factories. It has begun requiring all of its group affiliates to gradually elevate water and energy conservation targets. Cando Corp., a maker of color filters for TFT-LCD panels, is one of those that have installed AUO's water recycling system.

Since last year, AUO has also held quarterly "green commitment" seminars for its suppliers, with 700 of them participating to date. It has also enlisted the cooperation of selected suppliers to help develop water and energy conservation systems for other outside vendors.

Additionally, AUO hopes that in the future, this campaign's battleground will extend to the families of the company's 40,000 employees.

"By educating 40,000 employees, we can influence the environmental consciousness of 160,000 people," Niu says.

The company, therefore, persists in spreading the word on how to save water and energy. It encouraged a group purchase of water-saving faucets and guides employees how to conserve water at home. "AUO employees still aren't satisfied. They want to organize a second group purchase of water-saving faucets," Niu boasts.  

Although Typhoon Morakot has temporarily relieved Taiwan's drought crisis, the company's campaign to save water and energy continues.

"The drive to conserve water and energy is not simply to reduce costs. It's to fulfill our green commitment to the earth," AUO's chairman Lee stresses with sincerity and purpose.

Translated from the Chinese by Luke Sabatier