Rumor
Taiwanese panel makers shift capacity to fan-out panel-level packaging and silicon photonics
Sunday, December 28, 2025 at 11:48 PM
Taiwanese display manufacturers are pivoting to semiconductor advanced packaging and silicon photonics. Innolux has entered the SpaceX supply chain using fan-out panel-level packaging (FOPLP) with 700x700mm glass substrates. AU Optronics has joined the SEMI Silicon Photonics Industry Alliance, leveraging its subsidiary's III-V semiconductor capabilities (InP/VCSEL) to provide light sources for co-packaged optics (CPO).
Context
Taiwanese panel giants are pivoting from cyclical LCDs toward high-growth semiconductor segments like Fan-out Panel-Level Packaging (FOPLP) and Silicon Photonics. Innolux has captured significant market attention by entering the SpaceX supply chain, driving a 16.72% YTD stock surge as of January 2026. By utilizing 700x700mm glass substrates, Innolux achieves seven times the area utilization of standard wafers, facilitating a strategic valuation re-rating from traditional display multiples toward semiconductor levels of 20–30x.
Simultaneously, AU Optronics (AUO) is collaborating with TSMC and ASE within the Silicon Photonics Industry Alliance. AUO is leveraging its Micro LED and III-V semiconductor expertise to develop energy-efficient light sources for Co-Packaged Optics (CPO), targeting commercialization by mid-2026. While Innolux projects up to 5B TWD in FOPLP revenue for 2026, HannStar is exiting consumer electronics to focus on automotive and industrial panels, aiming for a 50% revenue share in these high-margin niches.
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