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SK Hynix Said to Be Reviewing Possible Acquisition of LG Display’s P7 Plant — Legacy Display Fabs Emerging as Takeover Targets for Semiconductor Firms

Legacy TFT-LCD fabs suffer from low production efficiency, and no amount of line conversion has been able to overcome the challenge of rock-bottom panel prices. Unable to turn a profit, these fabs have become assets up for sale by major panel makers. Not only are Taiwan's panel duopoly AUO and Innolux selling off old fabs one after another, but South Korea's LG Display (LGD) is also reportedly looking to sell its Gen 7 fab. Industry insiders note that outside of China, "panel fab sales" have already become a global trend, with semiconductor companies being the ideal buyers.

After TSMC acquired Innolux's Tainan Science Park (Southern Taiwan Science Park) Fab 4 for NT$17.14 billion in 2024, the market began to recognize the value of panel fabs' high-spec cleanrooms. Combined with the ability to save on construction timelines, and with AI demand triggering accelerated capacity expansion across the semiconductor industry, companies including TSMC, Micron, ASE Group, and SK Hynix have been continuously evaluating panel fabs both domestically and overseas, assessing potential acquisitions and lease arrangements.

In terms of recent developments, Innolux's Fab 5 is expected to be fully vacated of personnel and equipment by June, while Fab 2 is scheduled for clearance by September. Market rumors initially suggested that Micron—following its takeover of PSMC's Tongluo fab—would also acquire Innolux's Fab 5, rapidly expanding its memory footprint through a buy-and-convert approach.

However, competing rumors suggest the buyer of Innolux's Fab 5 is "not Micron" but rather a major semiconductor OSAT (outsourced semiconductor assembly and test) company, with details to be disclosed only after board approval and contract signing. According to panel industry sources reached by DIGITIMES, the OSAT company in question is reportedly ASE Group, though negotiations are still ongoing.

In response to these supply chain reports, ASE Group's spokesperson confirmed that the company has interest in acquiring the fab.

Innolux, for its part, stated: "Innolux has always prudently evaluated all asset allocation and operational site planning based on overall long-term strategy, industry trends, and shareholder interests. Should there be any concrete developments meeting the threshold for material information disclosure, we will make timely public announcements in accordance with regulations. We ask all parties to refer to the content published on the Market Observation Post System (MOPS)."

Beyond the Innolux Fab 5 developments, the industry has also reported that Radiant Opto-Electronics is evaluating the purchase of fabs from either AUO or Epistar. Radiant's interest is primarily driven by new business initiatives, as the company has in recent years acquired advanced optical technologies through M&A, expanding into optical components and metalens applications.

Meanwhile, Powertech Technology (PTI) recently spent approximately NT$6.9 billion to acquire AUO's fab in the Hsinchu Science Park. The move is aimed at expanding fan-out panel-level packaging (FOPLP) capacity to meet surging demand for advanced packaging from the AI, high-performance computing (HPC), and automotive electronics sectors. This also represents a key strategic deployment in PTI's medium- to long-term push into the AI packaging market.

Beyond the panel duopoly, HannStar Display's idle fab in the Southern Taiwan Science Park recently entered into a lease agreement with Wiwynn. Wiwynn leased the fab to accelerate production expansion in response to order fulfillment needs from its U.S.-based cloud service provider (CSP) customers.

Additionally, J-Touch Corporation ceased production at its Southern Taiwan Science Park fab on January 31, 2026, officially exiting the touch manufacturing business due to intense competition in the AMOLED touch sensor mark[...]

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