Thu, May 16, 2019 - Page 12 News List

Innolux CEO, president to take 15 percent salary cut

TURNAROUND PLAN:Despite recording its worst quarterly loss in about three years, the firm aims to retain talent by giving its ordinary employees a wage hike in August

By Lisa Wang  /  Staff Reporter

Innolux Corp (群創) yesterday said that its chief executive officer and president offered to take a 15 percent salary cut starting this month to show their determination to turn the unprofitable LCD panelmaker around using stringent new measures.

Other high-ranking executives would also see their paychecks reduced by 10 percent from next month, the Miaoli-based company said in a statement.

However, ordinary employees would see an annual wage hike in August as usual, the company said, adding that salary hikes are crucial to retaining talent.

“The pay cuts mean that we are determined to take responsibility to help the company play a bigger role [in the display market] and build a stronger position,” Innolux chairman Jim Hung (洪進揚) said in the statement.

Innolux last quarter recorded a quarterly loss of NT$3.73 billion (US$119.9 million), its worst in about three years, as panel prices collapsed due to a slump driven by overcapacity.

Hung, former president of Taiwan Cement Corp (台灣水泥) and a veteran investment banker, was tapped to serve as the company’s chairman less than a year ago to help with the overhaul of its panel manufacturing businesses.

Innolux disclosed the latest salary adjustments in response to a report yesterday by the Chinese-language Mirror News Weekly about wage cuts.

The report said that Innolux would begin collaborating with Sakai SIO International Guangzhou Co (超視堺) to supply panels to Huawei Technologies Inc (華為) from its Chinese fab over the next three years, citing an under-the-table meeting hosted by Hon Hai Precision Industry Co (鴻海精密) in March.

The report said that the arrangements were made at the cost of Innolux’s interests as Huawei is to become an indirect client of Innolux, implying thinner profits for the Taiwanese maker.

Sakai SIO International Guangzhou said on its Web site that Hon Hai and Sakai Display Product Corp in 2016 decided to invest 61 billion yuan (US$8.87 billion at the current exchange rate) to build a 10.5-generation fab in Guangzhou in partnership with the local government.

Despite escalating US-China trade tensions, Innolux said that it continues exploring the feasibility of collaborating with Chinese panelmakers to supply LCD panels to Chinese clients from operations based there, helping them to avoid heavy tariffs imposed by the US.

Innolux also dismissed the Mirror News Weekly’s claim that it provided its advanced indium gallium zinc oxide display manufacturing technology, commonly called IGZO, to Chinese panelmaker Xiangyang CaiHong Optoelectronics Technology Co (咸陽彩虹光電).

Some employees transferred to its “strategic partner,” but it was not a “talent drain,” Innolux said in the statement.

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