TSMC Purchases Innolux Plant for Advanced Packaging Capacity Expansion
TSMC announced that it has entered into a contract with Innolux to purchase its plants and ancillary facilities in Tainan. The building area is 96,027.09 ping, and the total transaction amount is NT$17.14 billion (US$529 million), which will be used for the purpose of operation and production.
The industry expects that TSMC's purchase of the Innolux Plant 4 will serve as a backup site for the subsequent expansion of advanced packaging and the research and development of new state-of-the-art packaging for mass production, as well as a flexible site for the expansion of advanced sub-3nm processes in Tainan in the future.
In the case of the sale of Innolux's Plant 4 in Southern Taiwan Science Park, the market originally rumored that TSMC would offer a 20% premium, with the total price looking up to NT$20 billion. However, today's announcement showed that TSMC only spent NT$17.1 billion to close the deal.
Innolux’s Plant 4 in Southern Taiwan Science Park was originally a 5.5-generation LCD panel plant, and after Innolux closed the plant in 2023, the market has been rumored that the optoelectronics company is actively looking for a buyer for the plant.
Innolux has also been actively seeking transformation. Its Gen 3.5 line in the Tainan plant has been converted to advanced packaging fan-out panel level packaging (FOPLP), while the Gen 4 line has been operated by InnoCare Optoelectronics, a subsidiary, to produce X-ray sensors.
Since Innolux is also actively involved in the new generation of advanced packaging, there are rumors that TSMC and Innolux may be exploring the possibility of cooperation in the future.
The market is optimistic that TSMC's plant purchase will be utilized to expand the production capacity of CoWoS advanced packaging for AI chips. TSMC Chairman C. C. Wei mentioned recently that even if the production capacity of advanced packaging CoWoS has doubled by 2024, it is still far from meeting customer demand, and even by 2025, supply and demand are still expected to be tight.
#TSMC #CoWoS #Innolux #FOPLP
