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Taiwan Panel Makers Revitalizing Older-Generation Fabs For High-Margin Products

Taiwan’s top-2 flat panel makers, Innolux and AU Optronics (AUO), are revitalizing their older-generation fabs to develop new display products with high margins for niche market applications, according to industry sources.

The new strategy is being implemented in response to aggressive capacity ramps through the establishment of newer generation LCD lines by China’s players and the shift of focus to OLED technology by Korea’s rivals, said the sources.

Instead of investing heavily on next-generation fabs, Taiwan’s makers have adopted a “rational” expansion approach, revitalizing their older-generation lines to roll out high-value products, said the sources.

Taiwan has been developing LCD panels for years, and its older-generation lines, which have been fully depreciated, are now competitive in developing next-generation display products, the sources added.

For example, Innolux is rolling out high-margin display products for applications including fingerprint sensors and mini LED backlight units (BLUs) for public information displays (PID) from its 3.5G LTPS LCD line in Chunan, northern Taiwan, according to CK Wei, an assistant vice president of the company’s technology development center.

Based on its production capacity of 65,000 glass substrates a month, the Chunan 3.5G fab is capable of rolling out 50 million units of glass capacitive fingerprint sensors a year, which is very competitive in terms of production cost, Wei indicated.

Innolux has also teamed up with Norway-based NEXT Biometrics to develop thermal-sensing flexible fingerprint sensors for use in smart cards, targeting the huge mobile payment market, Wei noted.

Innolux is developing optical in-display fingerprint sensors at its 3.5G LTPS fab, Wei said, adding that the company is developing X-ray sensors at its 4G a-Si line and other niche market products at its 3.5G a-Si line.

Meanwhile, AUO has remodified its 3.5G LCD line in Taoyuan, northern Taiwan, into a LTPS fab, which is currently focusing on the production of high-margin AMOLED displays for wearable devices. The 3.5G fab has a capacity of 7,500 substrates a month.―Digitimes

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