Innolux selling factory in Tainan to ChipMOS

Innolux Corp (群創) yesterday said it would sell a panel module assembly facility in Tainan to chip testing and packaging service provider ChipMOS Technologies Inc (南茂科技) for NT$880 million (US$27.65 million).ChipMOS clinched the deal as it seeks to expand capacity this year to satisfy customers’ growing demand for chips used in artificial intelligence (AI)-related devices. The disposal of Innolux’s Fab 2 would “inject fresh capital into the company’s operations and help drive future growth momentum,” the company said in a regulatory filing. The company said it expects to book NT$659 million in disposal gains. Innolux is looking to improve its profitability by optimizing its product portfolio and converting capacity for panel-level chip packaging services, as it faces an increasingly challenging market dominated by Chinese rivals. The company’s board of directors had authorized chairman Jim Hung (洪進揚) to seek potential buyers for Fab 2 and Fab 5, and help restructure the company. Local media speculated the potential buyers of Fab 5 could be US-based Micron Technology Inc or Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), but Micron was removed from the shortlist after it in January agreed to buy a fab in Miaoli County from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion. Innolux said it swung into a loss of NT$19 million in the final quarter of last year, compared with profits of NT$67 million in the previous quarter and NT$9.03 billion a year earlier. Non-operating income shrank to NT$56 million last quarter from NT$1.36 billion in the previous quarter and NT$14.5 billion a year earlier after selling a 5.5-generation plant to TSMC. Last year as a whole, Innolux’s revenue increased 4.7 percent to NT$226.72 billion from NT$216.51 billion in 2024. The flat panel display business accounted for 65 percent of total revenue last year, the company said. While operating losses decreased to NT$4.16 billion last year from NT$7.92 billion in 2024, the company’s net profit last year still plunged about 96 percent to NT$250 million from NT$6.47 billion in 2024. Earnings per share dropped to NT$0.03 from NT$0.76, it said. Innolux expects non-display product shipments this quarter to grow 27 to 28 percent from last quarter, with shipments of commercial displays projected to increase by a low-single-digit percentage and shipments of displays used in consumer electronics also likely to decline by a low-single-digit percentage, the company said.