Taipei, Aug. 16 (CNA) Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) will spend NT$17.14 billion (US$531 million) to purchase a plant and equipment in the Southern Taiwan Science Park from flat panel maker Innloux Corp.
In a statement filed to the Taiwan Stock Exchange, where TSMC shares are traded, the world's largest contract chipmaker said it had signed an agreement with Innolux for the transaction.
TSMC said in the statement that it was purchasing the facility -- with a floor area of about 317,445 square meters -- and equipment to help meet its needs for day-to-day operations and production.
However, analysts said the purchase was to help expand the capacity of the advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services used in artificial intelligence chips amid the global AI boom.
In an investor conference in mid-April, TSMC Chairman C.C. Wei (魏哲家) said he expected the company's CoWoS technology capacity to at least double in 2024 and 2025.
Wei said he hoped the CoWoS supply crunch would ease in 2025 and that stability would return in 2026.
In addition to CoWoS, Wei said, TSMC is developing Fan-out Panel Level Packaging (FOPLP) integrated circuit packaging technology, which is more advanced than standard wafer-level packaging (WLP).
Analysts said they did not rule out TSMC teaming up with Innolux in developing FOPLP technology, citing industrial sources as saying the chipmaker's research and development team has met with the flat panel supplier's R&D personnel.
TSMC has entered the high-end IC packaging business to provide a one-stop service to its clients.
According to TSMC, FOPLP technology is expected to be fully developed and ready to use in three years.
TSMC said on its website that it operates five back-end IC packaging plants in Hsinchu, Taoyuan and Miaoli in northern Taiwan, Taichung in central Taiwan and Tainan in the south.
TSMC previously started building one of the two planned plants using CoWoS technology in Chiayi, southern Taiwan. However, the work was halted in mid-June due to the discovery of a suspected archaeological ruin on the construction site.
At the end of July, an Innolux board meeting approved Jim Hung (洪進揚) to be in charge of divesting the 5.5th generation plant in the Southern Taiwan Science Park to boost the company's operating funds.
Innolux said in a separate statement posted on the TWSE that it is estimated to rake in about NT$14.7 billion from the transaction with TSMC. Analysts said the gains are expected to boost the flat panel maker's earnings per share by NT$1.62 this year.
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