Innolux says next factory will not produce TV panels

Innolux Display Corp (群創光電), the world's second-largest maker of liquid-crystal display panels for use in computer monitors, said its next factory will supply screens for computers and not televisions.

"We got budget approval from the board yesterday [on Wednesday] and we will finalize details in the next two weeks," Thomas Hsu (許嘉成), chief financial officer of Miaoli-based Innolux, said yesterday by phone.

The new plant will be either a so-called sixth-generation or a 7.5-generation factory, he said.

Innolux, an affiliate of Hon Hai Precision Industry Co (鴻海精密), the world's largest contract electronics manufacturer, supplies half of its panels from its own plants and purchases the rest.

Rivals such as AU Optronics Corp (友達光電), the nation's largest maker of LCDs, are expanding production capacity to meet growing demand for panels used in televisions. Larger generation factories make bigger display panels that are used to supply flat-screen TVs.

Innolux currently has a 4.5-generation factory with monthly capacity of 35,000 sheets of glass a month and a fifth-generation facility that can make 75,000 sheets. AU Optronics has a 7.5-generation factory that is able to produce 40,000 sheets a month and has said it will expand to 80,000 by the third quarter of next year.

Meanwhile, Innolux said it has no plan to acquire Amtran Technology Co (瑞軒科技) via a share swap as reported by the Chinese-language Economic Daily News yesterday, a company filing to the Taiwan Stock Exchange showed.

The newspaper, citing unidentified institutional investors, said Innolux had made an offer that valued each Amtran share as being worth a third of an Innolux share. Amtran is a top-three flat-panel manufacturer with a good presence in North America.

Amtran, whose shares increased by the daily limit to close at NT$62.40, also denied the share swap speculation in a separate statement sent to the stock exchange yesterday. Shares of Innolux fell 3.8 percent to NT$154.

Even so, SinoPac Securities Corp (永豐金證券) said in a note to investors yesterday that a strategic alliance between the two companies could help Amtran expand into foreign markets.

additional reporting by staff writer