TSMC to Acquire Innolux Plant for NT$20 Billion

TSMC is reportedly poised to acquire Innolux's 5.5-generation LCD panel plant in the Southern Taiwan Science Park (STSP), with a bid approximately 20% above the base price, totaling around NT$20 billion. The facility is expected to be repurposed for TSMC's advanced packaging and future process production needs. An official announcement may follow TSMC's board meeting on the 13th.

In response to market rumors, TSMC reiterated its stance from late July, declining to comment on the reported purchase of Innolux’s plant.

Originally used for producing laptop and monitor panels, the STSP plant was closed by Innolux in 2023 as part of a strategic shift. Interest from major players, including Micron and TSMC, has been rumored. Innolux, however, has kept a low profile on the matter, only revealing at the end of July that its board had approved the sale, granting Chairman Hong Jin-Yang the authority to handle the property transaction to meet business demands.

Chairman Hong Jin-Yang emphasized that beyond the financial terms, the sale’s potential to create new business opportunities for both parties is a key consideration. He noted that the transaction would contribute to Innolux's non-operating income.

Several companies had shown interest in the STSP plant, with the base price reportedly set at NT$18 billion. TSMC’s bid, 20% above the base price, could secure the deal as early as tomorrow's board meeting. Industry experts believe TSMC is particularly attracted to the plant due to its strategic location, just a five-minute drive from its existing facilities.

This acquisition is expected to support TSMC's expansion in advanced packaging and provide flexibility for future production processes, especially those below 3nm. TSMC’s 2nm production plans are already driving demand for nearby facilities, with the company on track to begin 2nm mass production by 2025 at its Baoshan site, which is undergoing a four-phase expansion.

With limited available space in the STSP area, TSMC's potential purchase of Innolux’s plant could strategically position the company for future growth. This move is similar to TSMC’s recent NT$668 million purchase of a factory in Baoshan in July, reflecting the company's proactive approach to securing critical infrastructure for its ongoing and upcoming projects.