TAIPEI, July 13 — Taiwanese display manufacturer Innolux Corp. announced plans to shut down one of its factories in the Southern Taiwan Science Park, signaling a strategic shift in response to evolving global market conditions.
The company confirmed it will gradually phase out operations at the plant by mid-2026, reallocating production to its other facilities. Innolux emphasized that clients will not be affected, assuring uninterrupted supply, stable production, and consistent product quality during the transition.
Market observers noted that the decision comes amid a slowdown in the global flat panel display sector, prompting manufacturers to reevaluate and diversify their operations. Innolux said the move aligns with efforts to reduce its reliance on flat panel products and focus more on long-term growth sectors.
While the future use of the soon-to-be-closed facility remains undecided, the company stated that an official announcement will be made once a detailed plan is in place.
The decision follows recent developments in Innolux’s strategic realignment. In June, its automotive electronics subsidiary CarUX Holding Ltd. revealed plans to acquire Japan’s Pioneer Corp., strengthening its foothold in the Asia-Pacific region and expanding its global automotive electronics portfolio.
In 2023, Innolux also sold another plant in the same science park, along with related equipment, to Taiwan Semiconductor Manufacturing Co. (TSMC) for NT$17.14 billion (US$587 million). That facility, like the one slated for closure, was among the company’s 5th to 5.5th generation plants, which focused on producing displays for notebooks and medium-to-small-sized screens.
Analysts interpreted TSMC’s acquisition as part of its initiative to bolster capacity for its advanced 3D Chip-on-Wafer-on-Substrate (CoWoS) packaging technologies, crucial for high-performance AI chips.
Innolux reported NT$0.78 in earnings per share for 2024, buoyed by the asset sale to TSMC — a financial turnaround after two years of losses attributed to a slump in the panel business.
Meanwhile, Innolux competitor AUO Corp. has also taken similar steps, selling two plants in Taichung and Tainan to the Taiwanese branch of U.S.-based Micron Technology Inc. for NT$8.1 billion. AUO said the move was designed to optimize its property assets and enhance its financial health.
As the global electronics and semiconductor markets continue to shift, both Innolux and its industry peers are adjusting strategies to stay competitive and capitalize on emerging opportunities.
