Micron to Buy AUO's Tainan Plants for HBM Expansion

After an unsuccessful bid to acquire Innolux's Nanke Plant No. 4, Micron Technology, a leading U.S. memory manufacturer, is reportedly considering the purchase of two manufacturing facilities from AUO Corporation (AUO) located in the Tainan Science Industrial Park. The deal, estimated to be valued between 10 and 20 billion New Taiwan Dollars (NTD), would involve acquiring both the buildings and the land. This move is part of Micron's strategy to expand its advanced packaging capabilities and enhance its high-bandwidth memory (HBM) production line, aligning with AUO's ongoing strategic transformation known as "Empty the Nest for the Phoenix."

In response to these reports, AUO stated on the 25th that it has adjusted the production scale at its Tainan facilities as part of its dual-axis operational strategy. While the company indicated it might consider reactivating these facilities at a suitable time, it declined to comment on specific transactions or companies. Similarly, Micron's spokesperson stated, "We do not comment on rumors or market speculation."

According to industry insiders, Micron is particularly interested in AUO's two color filter plants, identified internally as "C5D" and "C6C," which are located within the Tainan Science Industrial Park. These facilities were shut down in August 2023 and are ready for immediate transfer, ensuring no disruption to AUO's current operations.

Sources within the semiconductor and display panel sectors have indicated that Micron's expansion team has been actively visiting the Tainan area to inspect potential facilities for rapid capacity expansion. There are two primary reasons why semiconductor companies are interested in acquiring display panel plants: first, these plants offer substantial space, and second, the cleanroom specifications in display panel plants are quite similar to those required for semiconductor manufacturing, facilitating a smoother transition.

Previously, Micron had offered 18 billion NTD to acquire Innolux's Nanke Plant No. 4 to expand its AI-related advanced packaging and HBM production capacity. However, the deal did not proceed, as Innolux's board decided to sell the plant to TSMC for 17.14 billion NTD, with an estimated profit of around 14.7 billion NTD from the sale.

Following the unsuccessful attempt to acquire Innolux's plant, Micron reportedly shifted its focus to AUO's facilities in Tainan. Analysts suggest that AUO's facilities are located in an industrial park, unlike Innolux's plant in a science park. Purchasing a facility in an industrial park involves acquiring both the land and the buildings, which could result in a higher overall cost compared to purchasing a science park facility, where only the building rights are transferred. If AUO proceeds with selling its two Tainan facilities, considering factors such as land value appreciation and plant configuration, the total sale price is estimated to be between 10 and 20 billion NTD.