Taiwan's AU Optronics, the world's fourth-largest LCD maker, said on Thursday it would form a strategic alliance with Japan's Idemitsu Kosan to develop next-generation flat screen technology, as the industry struggles with falling prices.

The strategic alliance includes technological collaboration to develop high-performance OLED displays and OLED-related patents, according to an AU Optronics statement to the Taiwan stock exchange.

This will accelerate business growth in AUO's small-sized OLED displays for smartphones and tablets, which have emerged as a new growth area in the display industry, and that of large-sized OLED displays for TVs, AU Optronics said.

OLEDs, or organic light-emitting diodes, are expected to be used for next-generation flat panel displays.

Under the alliance, Idemitsu will supply OLED materials to the Taiwanese company, while AU Optronics will reinforce the development of OLED products at Idemitsu.

(Reporting by Clare Jim; Editing by Jonathan Standing)

Japan