TSMC and Micron Compete for Innolux LCD Plant

Recent reports indicate that TSMC has initiated discussions with Innolux and conducted an on-site inspection of Innolux's Tainan Plant 4, a Gen 5.5 LCD panel facility. This move aims to enhance TSMC's advanced packaging capabilities through potential collaboration with Innolux.

Innolux has stated that it does not comment on market rumors, while TSMC also declined to address the speculation.

Previous industry reports suggested that Micron was interested in acquiring Innolux's Tainan Plant 4, which was closed in 2023, for NT$18 billion. The latest updates reveal that TSMC recently sent personnel to inspect the facility as part of its strategy to bolster advanced packaging capacity and found the site satisfactory. TSMC hopes to integrate this site into its future advanced packaging operations.

Sources suggest that TSMC's proposal to Innolux is significantly more attractive compared to Micron's offer. Innolux is expected to decide between the proposals from Micron and TSMC as early as this week.

During the earnings call on July 18, TSMC Chairman Mark Liu addressed the supply and demand situation for CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging and its capacity progress. Liu noted that demand for CoWoS, driven by AI chips, remains strong, with CoWoS capacity expected to more than double in 2024 and 2025. He anticipates that supply constraints will ease by 2025, achieving a supply-demand balance by 2026.

Regarding TSMC's other advanced packaging technologies beyond CoWoS, Liu stated that TSMC is closely monitoring Fan-Out Panel-Level Packaging (FOPLP) technology. Although this technology is not yet mature, Liu expects it to reach maturity in three years, with TSMC actively developing FOPLP technology to be ready for implementation.