TSMC is undergoing a substantial expansion of its production capacity, with innolux plant acquisition & a constant augmentation of its facilities. According to a report from Liberty Times Net on August 15, the firm declared that it had entered into a contract with advanced packaging and panel maker Innolux to acquire its plant and related facilities situated in the Southern Taiwan Science Park.
The building has a total area that surpasses 96,000 square meters and has been sold for a transaction value of NTD 17.14 billion. This amount is significantly lower than the speculated market price of approximately NTD 20 billion. TSMC has declared that the facility will be utilized for operational and manufacturing purposes.
Innolux has just disclosed the sale of its 4th Plant in Tainan, which is a 5.5-generation LCD panel manufacturing facility. According to a previous article by Economic Daily News, speculations were suggesting that both Micron and TSMC had been aggressively investigating the possibility of acquiring each other.
Die size typically increases by 5-10% on average, which results in a decrease in the number of chips that can be obtained from a single wafer. This also puts further pressure on wafers and advanced packaging capabilities. According to industry insiders, the transition from wafer-level to panel-level packaging is considered to be a more economically efficient option.
Furthermore, reports indicated that TSMC proposed a price that was 20% higher than the initial pricing, intending to utilize the facility to enhance its capabilities in advanced processes or advanced packaging.
According to sources at the Southern Taiwan Science Park, as reported by Liberty Times Net, TSMC’s original factory is situated in the northwest section of the park, while the recently purchased Innolux unit is located in the southwest section. Therefore, the two plants are not near to each other.
TSMC acquired a plant from Hannstar in the past and subsequently dismantled and reconstructed it, as the design and construction requirements for panel factories are distinct from those for fabs. TSMC has also purchased a facility from E-Ton Solar Tech in the Southern Taiwan Science Park, which is now being utilized as a smart warehouse.
Considering Innolux’s reduced post-capital share capital of NTD 79.8 billion, the transaction is projected to generate around NTD 1.84 in earnings per share.
