AUO Corp (友達) yesterday said it has agreed to sell its idled manufacturing facility and land in Tainan to Micron Technology Inc for NT$7.4 billion (US$231.8 million) as the company shifts strategy to reduce the impact from the boom-and-bust flat-panel display industry.
The company expects to book NT$4.17 billion in disposal gains from the sale, it said in a Taiwan Stock Exchange filing.
The Tainan factory produced color filters used in monitors, notebook computers and flat-panel TVs before being shut down last year, as AUO sought to optimize its asset utilization.
Photo courtesy of AUO Corp
The company has been striving to diversify and broaden its business scope in the past few years to minimize the impact of the LCD industry’s volatility.
The company aims to boost sales contribution from its non-panel business to half of its total revenue by 2027, AUO chairman Paul Peng (彭双浪) said last month.
In addition to the Tainan plant, AUO also agreed to sell the facilities owned by its solar energy subsidiary AUO Crystal Corp (友達晶材) in Taichung for NT$700 million, the flat panel maker said in a separate filing. The deal would bring about NT$544 million in disposal gains for the company, it said.
Micron Technology, the world’s No. 3 memorychip maker, said in a statement yesterday that it plans to deploy new wafer testing capacity by converting AUO’s Tainan factory into a front-end wafer testing facility, which would support its DRAM chip manufacturing expansions in Taichung and Taoyuan.
Market researcher Trendforce Corp (集邦科技) said the transaction with Micron would help AUO improve its overall financial structure this year.
AUO has been in the red for more than two years and reported net losses of NT$3.76 billion in the first half of this year.
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