[News] Innolux Denies Plant Sale Plans in Southern Taiwan amid TSMC’s Purchase Rumors

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The AI boom has boosted the semiconductor industry, increasing the demand for advanced packaging production capacity. According to a report in Economic Daily News, TSMC is rumored to be considering the acquisition of another Innolux plant, particularly its 7th plant in the Southern Taiwan Science Park. However, on October 29, Innolux stated that there are currently no plans to sell the entire plant.

In August this year, TSMC purchased Innolux’s 4th plant in Tainan for NTD 17.14 billion, naming it AP8. It is rumored that TSMC intends to buy another of Innolux’s plants, specifically considering the acquisition of its 7th plant, which is adjacent to the 4th plant that TSMC previously acquired.

However, the report indicated that the management at Innolux holds differing opinions on the sale of its 7th plant and has been unable to reach a consensus.

Innolux’s 7th plant features a 7.5-generation production line primarily dedicated to manufacturing TV panels, and various energy-saving, water-saving, and waste reduction measures were implemented, as mentioned by the report.

As for the plant that TSMC previously acquired from Innolux, the AP8, according to a report by China Times, is expected to start production in the second half of 2025. More importantly, the fab will not only provide foundry services but also the eagerly needed capacity for advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services, as the report noted.

The move will be critical for TSMC to meet the surging demand for the advanced packaging capacity for AI servers, according to the report. Its future capacity will reportedly be nine times that of AP6, TSMC’s advanced packaging fab in Zhunan, as the report from China Times noted.

Regarding the current situation of Innolux, its Q3 financial report showed disappointing results. According to a report from Commercial Times, the company recently announced its financial performance for the third quarter of 2024. Due to a decline in TV panel revenue, Innolux recorded a net loss.

According to its press release, consolidated revenue for the third quarter was NTD 55.473 billion, a quarter-on-quarter decrease of 2.4%, while the gross profit margin fell to 9%. The company posted a net operating loss of NTD 790 million, with net profit of approximately NTD 494 million, resulting in a net profit per share of about NTD 0.05.

In 3Q24, the company shipped 6.08 million square meters of total panel, a decrease of 9.3% quarter-on-quarter.

According to its press release, looking ahead to the fourth quarter of 2024, Innolux noted that the timing has entered the traditional off-season for panels. However, China’s new subsidy policy may boost the demand for TV sets. While TV panel prices are expected to remain stable, demand for IT panels is anticipated to slow down.

According to the Commercial Times report, Innolux projects that shipments of large-size panels will decrease by 5% to 9% in the fourth quarter, with the average unit price of shipments declining by less than 5%. In contrast, shipments of small and medium-sized panels are expected to grow by 15% to 19%.

Read more

• [News] TSMC’s Newly Acquired AP8 Facility in Southern Taiwan Rumored to Start Production in 2H25
• [News] TSMC Acquires Innolux’s Plant in Southern Taiwan to Expand Advanced Packaging Capacity

(Photo credit: TSMC)