TAIPEI (Taiwan News) — Taiwan’s two largest display makers are accelerating capacity cuts as the display industry shifts toward higher-value technologies, market researcher TrendForce said Monday.
TrendForce said Innolux and AUO are moving away from competing on production scale and instead focusing on advanced technologies and higher-margin applications, per CNA.
It forecasts that by 2028, the two companies’ combined share of global LCD monitor panel supply will fall below 10%, while their LCD laptop panel share will decline to about 20%. Their share of LCD TV panel supply is expected to remain around 22%.
According to TrendForce, Innolux is expected to convert older facilities to support advanced packaging and phase out LCD laptop panel production. The market researcher said the company plans to shut down its Fab 3 production line between late 2027 and 2028 as growing OLED adoption in laptops weakens demand for LCD panels.
The research firm said Innolux has expanded into technologies including fan-out panel-level packaging, co-packaged optics, and through-glass via. It said the Fab 3 site could become a hub for advanced packaging and other high-value applications.
TrendForce said AUO is also restructuring its operations through investments in Micro LED, AI, and CPO technologies while selling older manufacturing assets. The company recently agreed to sell its Huaya plant in Taoyuan to Quanta Computer and its C5E plant in Kaohsiung to ASE Technology.
TrendForce said further reductions in AUO’s older LCD production lines could significantly affect global panel supply. It estimated that if the company closes its L6A plant, annual LCD monitor panel supply would decline by nearly five million units, while a sale of its L7A production line would reduce global LCD TV panel production capacity by about 2.1%.
TrendForce said Chinese manufacturers are expanding aggressively in the LCD laptop panel market, while major brands are shifting to OLED displays. It said the transition will further pressure LCD demand, making capacity reductions necessary and helping improve the balance between supply and demand.
