Innolux is selling multiple factories to strengthen its financial position and operations. Following an announcement of a standard factory sale to ChipMOS, Innolux disclosed on March 24, 2026, the sale of its Fab 2 plant to ASE's Siliconware Precision Industries (SPIL), expecting a disposal gain of about NT$5.8 billion (US$181.8 million).
On March 10, Innolux announced it had sold a factory located in Southern Taiwan Science Park to ChipMOS. The facility covers 34,300 square meters and will be used by ChipMOS for capacity expansion.
This smaller standard factory sale is expected to generate a disposal gain of around NT$659 million, with proceeds earmarked to support operations and future growth initiatives.
Just two weeks later, Innolux revealed another major asset sale involving a large-scale factory and related facilities in Southern Taiwan Science Park. The building spans 139,168.11 square meters. The buyer is SPIL with a transaction value of NT$6.325 billion and an estimated disposal gain of NT$5.8 billion, pending final accounting after fees.
This site corresponds to Innolux's Fab 2 plant, a 4G line primarily producing medical and small-to-medium-sized panels. InnoCare Optoelectronics, previously operating there, plans to relocate production to the TOC plant. Innolux intends to reinvest the capital from this sale into operational funding and strategic development.
Following the confirmed sale of Fab 2, attention now turns to Fab 5, rumored to be targeted by ASE. Driven by urgent demand for advanced AI chip packaging capacity, ASE prefers acquiring existing plants with full infrastructure over new builds, enabling rapid scale-up through substantial purchases of ready-made fabs.
Besides these confirmed sales, market rumors suggest that Innolux's Zhunan T1 plant may also face closure. Additionally, some automotive production lines from Plant 3 are reportedly shifting to Plant T6, fueling speculation about further factory consolidations.
Innolux's ongoing divestments could be a deliberate strategy to reduce fixed costs and consolidate production lines. Continued asset sales are expected to yield significant non-operating income in 2026. Converting real estate assets into cash not only improves financial structure but also provides "ammunition" to invest in emerging technologies such as fan-out panel-level packaging (FOPLP) and silicon photonics, facilitating the company's "rebirth."
Experts note that frequent asset disposals help Innolux "sell factories to replenish funds" while attracting investor interest in its semiconductor packaging potential, supporting valuation re-rating.
Existing panel fabs typically feature comprehensive cleanroom systems, stable power supplies, ultra-pure water treatment, and robust waste management—critical "ready-to-go" infrastructure amid Taiwan's tightening electricity and water resources.
Building a new advanced packaging fab usually takes 3-5 years plus environmental approvals and infrastructure setup. Acquiring established panel fabs dramatically shortens lead times, allowing equipment installation and mass production to start quickly.
Chairman Jim Hung recently stated that starting 2025, the company will retain only the most suitable product lines during consolidation. Given persistent oversupply in panels, Innolux aims to focus on select customers rather than entering every market segment.
Article translated by Charlene Chen and edited by Joseph Tsai
