AU Optronics have denied the charges and intends to lodge an appeal against the judgment.
Two senior executives of the firm have also been sentences to three years in prison and fined USD 200,000 each.
US prosecutors had asked for a fine of USD 1bn after the firm was found guilty. Heather Tewksbury, the attorney for US Department of Justice antitrust division, argued the fine was not adequate.
“$500m is not enough to deter cartels like this from forming,” she said. “AU Optronics is getting a 50% discount and that’s an inequitable result.”
US authorities have made a series of moves against LCD makers for price fixing.
Last year, South Korea’s Samsung and six other LCD makers paid USD 553m to settle such claims.