Amid escalating US-China tensions, compaines in both Taiwan and China are eyeing investment opportunities in South and Southeast Asia. Taiwan's AUO is expanding into Vietnam, while Innolux is partnering with Vedanta in India for an LCD factory. China's major panel factories like BOE, TCL China Star Optoelectronics Technology (TCL CSOT), and HSK are investing in the region. These moves reflect a strategic shift in the display industry, positioning the region as an emerging essential production base for electronic products such as smartphones and laptops. Investment in the area is appealing to the suppliers given the population dividends, tariff incentives, subsidies, and lower labor costs.
Innolux is moving forward with Vedanta although the Indian company's collaboration with Foxconn fell through. The details of Innolux's plan with Vedanta were never publicly revealed, but industry sources expect that the company will build a 8.6 generation LCD factory with capacity of 60,000 glass substrates. The estimated total investment is US$4 billion, and the backend modules are said to begin production mid-2024 and frontend late 2025 to the first half of 2026. India is said to potentially have the demand for 3 production lines of eighth generation panels. The partnership is expected to bring in no small amount of technology licensing fee for Innolux.
AUO's first factory in Southeast Asia is in Hanoi, Vietnam. The factory there manufactures IT products like LCD monitors. AUO plans to invest NT$1 billion (US$3.13 million) in its Hanoi plant, which is expected to begin mass production by the first quarter of 2024. Beyond panel manufacturers, other Taiwan-based companies in the supply chain have also set foot in Vietnam. These include backlight module vendors like Coretronic and Radiant Opto-Electronics, light guide plate supplier Global Lighting Technologies, LCD monitor assembly factory Qisda, LCD assembly factory and TV brand, Amtran Technology.
China-based firms are not behind in expanding into other parts of Asia. China's top three panel factories, BOE, CSOT, and HSK are also moving to Southeast Asia. BOE plans to invest US$400 million to build two factories in Vietnam, which are intended to supply TV screens for companies based in South Korea. CSOT has chosen Tirupati in India, as its first overseas location, primarily focusing on TV module production and it will serve both the local and the global market. HKC, one of China's top three panel factories, recently opened a factory in Vietnam with an annual production capacity of 3 million units and a registered capital of US$10 million. This factory will produce monitors and TVs. HSK comes after Foxconn, BOE, and Amtran to set up factories in Vietnam. Even more OEM companies in China are expected to follow.
Article translated by Julie Chang
