Innolux and AUO restructure capacity to focus on high-value display technologies

Major Taiwanese display manufacturers Innolux and AUO are undergoing significant capacity restructuring to shift from scale-based competition toward high-value technologies. According to TrendForce, the combined supply share of these two companies in the LCD monitor market is expected to fall below 10% by 2028, while their share in the LCD laptop market is projected to drop to nearly 20%.

Innolux plans to close its Fab3 production lines, primarily focused on LCD laptop panels, by late 2027 or 2028. The company aims to repurpose this site for advanced packaging and high-value applications such as FOPLP and CPO. Similarly, AUO is divesting older assets, including its Huaya and C5E plants, to redirect capital toward Micro LED and AI-related technologies.

Market dynamics are also being influenced by the rising penetration of OLED panels in the laptop and monitor sectors. While demand for LCD TV panels is expected to remain stable due to year-end seasonal stocking, the laptop panel market faces downward pressure. In the short term, panel manufacturers are maintaining price stability across various segments, including monitors and laptops, due to rising component costs.