Tue, Mar 05, 2019 - Page 12 News List

Innolux renewing fabs to shift focus

‘RED OCEAN’:China’s irrational LCD panel investments could lead to a supply glut, to which Innolux is responding by focusing its production on fingerprint sensors

By Lisa Wang  /  Staff Reporter

LCD panel maker Innolux Corp (群創) yesterday said that it is modernizing its old fabs to manufacture higher-margin fingerprint sensors and miniLED backlights for public displays and TV panels, instead of investing heavily on next-generation fabs.

The Miaoli-based company said that it began looking for new products that can be produced at its less-advanced factories about six years ago in a bid to shift away from the standard flatpanel market amid China’s frenzy of investing in 8.5 and 10-generation LCD panel factories.

China’s irrational investments would lead to a supply glut and “put Taiwan under heavy pressure,” C. K. Wei (韋忠光), an assistant vice president of Innolux’s technology development center, told a media briefing in Taipei.

Fingerprint sensors are Innolux’s answer to the “red ocean” of rivals, Wei said.

“Glass substrates, especially those made at 3.5-generation fabs, are more suitable for producing fingerprint sensors than wafers made by semiconductor companies, given lower manufacturing costs and larger capacities,” he said.

Innolux plans to allocate two 3.5-generation fabs and one 4-generation fab to the production of high-margin niche products, including new fingerprint sensors, OLED panels for mobile phones and wearable devices, as well as miniLED backlights, Wei said.

The three fabs are approaching full utilization as Innolux has received new orders from customers, which is in stark contrast to lower factory usage at fabs producing TV and PC panels, he said.

Innolux said it has been making capacitive fingerprint sensors to unlock mobile phones at a 3.5-generation fab in Miaoli and is taking one more step further in developing large fingerprint sensors, supporting biometric identification systems used in credit cards and mobile payments that require a higher level of security.

The advanced fingerprint sensors can deliver a much better gross margin than existing products because of higher technological barriers, it said.

Innolux also yesterday announced a collaboration with fingerprint sensor supplier SuperC-Touch Corp (速博思) and fingerprint scanner maker Startek Engineering Inc (星友) to tap into India’s fast-growing fingerprint market.

Fingerprint scanners equipped with Innolux’s sensors are to hit the market in the first quarter of next year at the earliest, Startek chairman Hsu Wen-hsing (許文星) said.

About 40 million fingerprint scanners are to be installed in India within five years as the country plans to have 80 percent of its 1.2 billion population register their fingerprints to accelerate mobile payment development, Startek said.

Innolux is also working with customers in developing new optical under-display fingerprint sensors for smartphones.

The company declined to disclose its timetable for mass production, saying it did not want to reveal customers’ trade secrets.

The company reutilized the 3.5-generation plant to produce miniLED backlights for large display panels.

Innolux said it shipped its first public display panels using miniLED backlights earlier this quarter and plans to deliver its first 75-inch TV panels illuminated by miniLED backlights next quarter.

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