Taiwanese tech giant Innolux has been reaping the rewards of its multi-year transformation plan, with significant revenue growth in non-display sectors in recent years. Non-display revenue accounted for 10% in Q122 and has steadily increased to 22% in Q2 this year, with car-related products being the primary revenue driver in the sector. This shift is a result of Innolux's proactive approach to divide its focus into two major areas: displays and non-displays, aiming to provide complete solutions to its clients.
The non-display sector includes Innolux's listed subsidiaries, InnoCare Optoelectronics and CarUX. The success of its automotive-related business is attributed to the integration of hardware, software, and firmware, as well as strategic partnerships. CarUX's role as a Tier 1 supplier has allowed it to integrate various components and softwares, making it an attractive choice for car manufacturers looking for comprehensive solutions.
Car companies used to seek Tier 1 suppliers for software and panel suppliers for hardware, which resulted in a mismatch, says Innolux's president James Yang. He adds that the trend of integration is evident in electric and autonomous vehicles, with customers from Europe, America, and China showing preference for such integrated solutions. The company's chairman, Jim Hong further adds that CarUX is committed to add cabin entertainment, autonomous navigation, and charging pile information display system vendors to its partner network, in order to provide its clients an even more comprehensive manufacturing option.
In the display sector, Innolux's focus is on panel modules, aiming to improve yield, gross margin, and market share. The company has a positive outlook for 2024, expecting growth in panel shipments and a healthier supply-demand balance. In response to market demands, its panel factories are also undergoing adjustments, considering economic efficiency and economies of scale for different generation lines.
In response to its diverse growth strategy, Innolux has reorganized its older generation production lines. The company has already spun off some product lines into separate subsidiaries, like InnoCare and CarUX. Market observers are now wondering whether other product lines, such as e-paper, low earth orbit (LEO) satellites, PLP, or medical products, may be further spun off into independent entities, to which Hong says, a multitude of factors have to be taken into consideration for them to make such decisions.
Article translated by Julie Chang
