[News] Display Maker AUO to Sell Taichung Plants to TSMC for TWD 38.8B; Separate Quanta Deal Canceled
Taiwanese display maker AUO announced two major asset disposal developments, including the termination of a planned factory sale to Quanta and a TWD 38.8 billion (US$1.2 billion) deal to sell its Taichung Phase 2 facility to TSMC, according to TechNews. The planned sale of AUO’s Huaya facility to Quanta was canceled after the two companies failed to agree on factory specifications and the delivery schedule.
According to AUO, its board approved the sale of the Taichung Phase 2 facility and related infrastructure to TSMC. The transaction covers buildings, cleanrooms, and supporting equipment, with a registered floor area of approximately 429,000 square meters (129,800 ping) and a usable area of around 166,000 ping. The deal is valued at TWD 38.8 billion, excluding taxes, and AUO expects to recognize a disposal gain of approximately TWD 18.5 billion, the report notes.
The facilities include a fifth-generation (Gen 5) and a 7.5-generation (Gen 7.5) display plant, according to Economic Daily News. AUO Chairman Paul Peng said the sale supports the company’s shift toward an asset-light operating model and efforts to strengthen its financial structure, adding that its asset monetization initiative is nearing completion.
Notably, TSMC’s acquisition involves more than just land, as the existing facilities include cleanrooms and supporting infrastructure, according to Mirror Media. Acquiring existing facilities could reduce some construction work compared with building a new fab from scratch. However, any time savings would depend on the facilities’ suitability for semiconductor production and subsequent renovation and equipment installation plans.
TSMC’s Taichung Expansion Could Strengthen Advanced Packaging and CPO Ecosystem
The deal comes amid TSMC’s broader expansion in Taichung. The company plans to invest approximately TWD 1.5 trillion in four new 1.4nm fabs at the Central Taiwan Science Park, with the facilities expected to be completed in phases starting in 2027, according to Central News Agency.
The acquisition could strengthen TSMC’s manufacturing and packaging operations in Taichung. According to Commercial Times, TSMC’s existing Fab 15 primarily uses 28nm and 7nm processes, with 5nm capacity gradually being added. Its planned Fab 25 will focus on 1.4nm process, while the nearby AP5 advanced packaging facility supports CoWoS-L technology.
Industry sources suggest that acquiring AUO’s facilities could help TSMC further integrate advanced chip manufacturing and packaging in the area. Together with nearby optical component suppliers, the expanded footprint could also support the development of a co-packaged optics (CPO) ecosystem, Commercial Times adds.
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(Photo credit: TSMC)
