Rumor has it that another panel manufacturer may be planning to sell its LCD factory

Recently, the industry has reported that TSMC has decided to purchase another old plant of Innolux in Nankai, mainly to meet the CoWoS demand driven by AI. The industry estimates that after the purchase of the plant, it can be put into production as early as 2026. The monthly production capacity of CoWoS in that year has the opportunity to reach 150,000 to 160,000 pieces, which means that the production capacity has doubled for three consecutive years. Innolux has been actively transforming into the semiconductor field. Chairman Hong Jinyang once emphasized that he hopes to start technical cooperation with semiconductor manufacturers by selling factories. Recently, the 5.5-generation production line of Fab4 (Factory 4) in Nankai was sold to TSMC (2330). Regarding the market rumor that Innolux will sell Fab3) or Fab5 (both 5-generation LCD factories) to TSMC in the near future, Innolux said that it will not respond to market comments.

It is understood that when TSMC was evaluating its process and plants, it was most interested in Innolux's Fab6 (Fab 6) located in the Tree Valley Park, and the Fab's 6th generation line specifications best met TSMC's future FOPLP needs. However, the property rights of Innolux's Fab 6 still belonged to Chi Mei Industrial, which made the transaction more complicated. Therefore, TSMC's evaluation target was further transferred to Innolux's Fab 3 or Fab 5.
Industry insiders analyzed that TSMC had previously purchased Innolux's Fab 4, and Innolux's Fab 3 and Fab 5 in Nanke had a geographical relationship with Fab 4, and the property rights were simple. TSMC's new plant is very likely to be one of Fab 3 or Fab 5. Based on the previous sale of Fab 4 to TSMC for a settlement amount of NT$17.14 billion and the recognition of NT$14.7 billion in disposal profits, if Innolux sells a plant with a similar scale and generation to Fab 4 this time, it will have considerable disposal profits to be recognized in this year's financial statements. The building area of ​​Innolux's 4 plants is 317,444.93 square meters. Innolux is deploying FOPLP technology. According to the current plan, Chip-first (chip-first process) will be mass-produced at the end of this year and will start to contribute revenue in the first quarter of next year; RDL (rewiring layer) is still in the verification stage and is expected to be mass-produced in 1-2 years; TGV packaging (glass through-via) will be mass-produced in about 2-3 years.
Innolux said that the sale of Innolux's plants to TSMC will help the company's operations to turn losses into profits this year, and with the accelerated demand for semiconductor companies to expand their plants, Innolux also has other plants with sales potential and is expected to obtain more funds. The production capacity of Chip-first is mainly for IDM plants for automotive and PMIC products. It is expected that when the production capacity is fully loaded, the revenue can grow by mid-single digits; RDL and TGV focus on glass processing processes, and the applications are mainly in high-end fields such as AI/HPC. Potential customers include OSAT plants, and it is expected that 2026 and 2027 will be the time for flowering and bearing fruit.