TSMC in talks to acquire AUO panel factories to boost advanced packaging capacity

Taiwan Semiconductor Manufacturing Company (TSMC) is in discussions to acquire two panel factories from AU Optronics (AUO) located near its existing facilities in Taiwan, according to local media reports. The primary objective of this acquisition is to significantly expand TSMC's advanced packaging capacity, a critical segment for modern semiconductor production.

The two facilities, AUO's L7 and L5C plants in Taichung, previously manufactured display panels. TSMC intends to repurpose these sites for advanced packaging technologies such as Fan-Out Panel Level Packaging (FOPLP) and CoWoS (Chip-on-Wafer-on-Substrate). Industry insiders suggest the transaction could be valued at over NT$300 billion (approximately RMB 6.3 billion), potentially setting a record for the sale of older generation panel factories in Taiwan.

While both TSMC and AUO have issued standard 'no comment' responses to market speculation, sources familiar with the matter indicate that negotiations are advanced and TSMC has already conducted site inspections. The deal is expected to leverage AUO's expertise in handling large glass substrates, combining it with TSMC's leading-edge packaging technologies.

Analysts view this move as a strategic effort by TSMC to secure and enhance its position in the competitive advanced packaging market. The expansion is driven by the growing demand for specialized chip solutions, particularly for AI and data center applications. The acquisition also aligns with an industry trend of utilizing existing infrastructure to accelerate capacity expansion.