Innolux confirms plan to close factory in southern Taiwan

Taipei, July 12 (CNA) Innolux Corp., one of the leading flat panel makers in Taiwan, has confirmed a plan to close a factory located in the Southern Taiwan Science Park to reduce its ratio of flat screen production to its overall product portfolio.

Market analysts said the move reflected a downturn in the global market.

Innolux said it will transfer production currently in the plant to other facilities, but the change is unlikely to affect its clients, as the company has ensured there will be sufficient supply to satisfy existing orders and that production will not be interrupted, and that quality will be maintained.

The local news media reported that the affected plant will be completely phased out by mid-2026.

Innolux said it will continue to devote its resources to other areas with great potential to grow in the long term, while an exact plan for the affected plant's future will be announced when it becomes available.

Late last month, Innolux announced its smart cockpit solutions subsidiary CarUX Holding Ltd. has agreed to acquire Japan's Pioneer Corp. as part of the parent company's strategy to expand in the global automotive electronics market.

Innolux described the acquisition of Pioneer as a strategic move to boost CarUX's presence in the Asia-Pacific market and diversify its global business portfolio.

Last year, Innolux sold another plant, also located in the Southern Taiwan Science Park, as well as equipment to contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) for NT$17.14 billion (US$587 million).

Analysts attributed the purchase by TSMC to its aim to expand the capacity of the advanced 3D Chip-on-Wafer-on-Substrate (CoWoS) IC packaging services used in artificial intelligence (AI) chips.

Innolux reported earnings per share of NT$0.78 in 2024 after selling the plant to TSMC -- a move aimed at offsetting weakness in its panel business and reversing two years of losses.

The plant sold to TSMC and the plant to be closed were the 5th to 5.5th generation plants, specializing in rolling out displays used in notebook computers and medium and small-sized screens. In addition to the two plants, Innolux still has two other 5th-generation facilities.

Innolux's rival AUO Corp., meanwhile, has sold two plants, one in Taichung and the other in Tainan, to the Taiwan subsidiary of U.S.-based dynamic random-access memory (DRAM) chip supplier Micron Technology Inc. for NT$8.1 billion.

AUO said the sale was aimed at optimizing the use of its property and improving its financial structure.