New 8.6-Gen Fabs Accelerate Capacity Shift, Putting Smaller LCD Lines Under Pressure, Says TrendForce

According to TrendForce’s latest research on the display panel industry, technological upgrades, rising production cost pressure, and the gradual ramp-up of new 8.6-gen fabs are reshaping the LCD manufacturing landscape. 

In recent years, Taiwanese panel makers have steadily shut down older, smaller-generation lines while expanding into new business areas. Concurrently, Chinese panel makers continue to increase output from higher-generation fabs. TrendForce estimates that 8.6-gen capacity will account for about 26% of global LCD production in 2026, as the industry continues to concentrate production in higher-generation fabs.

Innolux recently announced that its board approved the sale of part of its module facilities in the Tainan Science Park, and authorized the chairman to handle the disposal of Fab 2 and Fab 5 in the same location. TrendForce notes that Fab 5 is expected to end production in 2Q26. 

Innolux previously shut down Fab 4, which was later sold to TSMC. Meanwhile, AUO has also closed several facilities between 2023 and 2025, including the L4B plant in Singapore and the L5A plant in Taoyuan. Consequently, TrendForce expects that by 2026, Innolux and AUO will each hold roughly 9% of global LCD capacity, with market shares declining to 9.1% and 9.2%, respectively.

TrendForce believes that as more older lines exit the market, capacity from Gen-5 and earlier fabs will fall to about 4.7% of the global LCD market in 2026. This is 0.5 percentage points down from the previous year. In contrast, capacity from 8.6-gen lines continues to expand. 

Capacity has increased at CSOT’s T9 and BOE’s B19 fabs following process optimization, while Tianma’s TM19 line is still ramping up production. In addition, Laibo’s Phase 1 project is preparing to enter mass production, which together could lift the share of 8.6-gen capacity by 1.4 percentage points year over year.

Because several 8.6-gen lines are still ramping up, and because new facilities such as Tianma TM19 and Laibo are targeting applications including notebook and automotive panels, competition is expected to intensify as yields improve. Over the next two to three years, these newer lines could place significantly greater pressure on the less competitive Gen-5 and Gen-6 fabs, increasing the likelihood that older LCD production lines will close more quickly.

Taiwanese panel makers are responding by lightening their asset load, which includes selling or repurposing aging facilities while expanding into new business segments. For example, AUO has promoted its “Four AI Pillars” strategy, while Innolux is investing in advanced packaging technologies. 

Both companies aim to leverage their existing engineering and manufacturing capabilities to enter semiconductor-related sectors and reduce their reliance on the cyclical display industry, amid growing competition from Chinese panel makers.

For more information on reports and market data from TrendForce’s Department of  Display Research, please click here, or email the Sales Department at DR_MI@trendforce.com

For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit https://www.trendforce.com/news/