Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), yesterday said it has signed an agreement with Innolux Corp (群創) to acquire the flat-panel display maker’s plant in Tainan for NT$17.14 billion (US$530.6 million) amid supply constraints of its advanced packaging capacity constraints.
TSMC plans to use the plant, including buildings and manufacturing facilities, for future operations, the world’s biggest foundry service provider said in a filing with the Taiwan Stock Exchange.
The chipmaker did not elaborate on whether it would convert the plant into a new panel-level packaging factory, or expand its advanced packaging chip-on-wafer-on-substrate (CoWoS) capacity.
Photo: An Rong Xu, Bloomberg
The chipmaker "is working whatever it can" to more than double CoWoS capacity this year and next year in order to solve a severe shortage on strong artificial-intelligence (AI) chip demand, TSMC chairman C.C. Wei (魏哲家) told investors in June.
Innolux shut down the 5.5-generation plant last year after losing its competitive edge in producing cost-effective flat-panel displays.
The company now focuses on rejuvenating its existing facilities and works to diversify into new businesses including chip packaging. Its strategy is to transform itself into a company with two major revenue sources — display and non-display.
The deal with TSMC would allow Taiwan to play a crucial role in the global technology sector and economy, Innolux said yesterday.
Earlier this month, Innolux chairman Jim Hung (洪進揚) told investors that the company expected the asset disposal to bring new business opportunities and form partnerships to enhance its technological capabilities.
Innolux has already built fan-out panel-level packaging (PLP) capacity by converting a less-advanced 3.5-generation plant into one which would provide entry-level chip packaging services for power management chips and radio frequency chips.
The company intends to collaborate with major foundry service providers to advance its chip packaging technology as it looks to pursue opportunities stemming from the AI business, Innolux president James Yang (楊柱祥) said earlier this month.
Innolux expects the new chip packaging business to contribute significant revenue in the first quarter of next year.
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