It was a big Valentine’s Day for the panel manufacturer, publicly disclosing an agreement to transfer TFT LCD panel and module technology to India’s Vedanta while also reporting a 36.1% drop in sales to NT$223.7 billion ($7.74 billion) with an operating loss of NT$ 31.7 billion ($1.09 billion).
According to Charles Annis at Omdia, we can assume that Vedanta is building a fab, probably in Bharuch, in the state of Gujarat, similar to Innolux’s Fab 8B, and a capacity for 60,000 Gen 8.6 or 2250 x 2600 mm substrates. Whatever the timelines may end up being, Vedanta isn’t going to be contributing to Innolux’s bottom line other than in a one-off payment to facilitate the transfer, and royalties to kick in when production is online.
In the meantime, Innolux had a brutal drop in every metric of its financial performance. In Q4’22, the company shipped 6.40 million square meters of panels, an increase of 4.8% quarter-on-quarter with a blended ASP for TFT-LCD panels averaging $ 235 per square meter. Small and medium-sized panel revenues dropped 17.4% quarter-on-quarter. The company shipped 673.0 thousand square meters of small and medium-sized panels, a decrease of 9.6% quarter-on-quarter.
The company was more upbeat on 2023 with an expectation of a traditionally slow first quarter, but inventory levels stabilizing and more attention being paid to the product mix.
| Product Application | Sales Percentage in Q4’22 |
| Mobile PC | 19% |
| Mobile & CP | 15% |
| Auto | 22% |
| Desktop | 8% |
| TV Panels | 36% |
But, Innolux has a pretty strong patent portfolio and that IP should hold give it some opportunities to rethink its business model as it pursues future profits. You can probably expect that there will be some non-display developments in the future. Much of the technology behind flexible displays is adaptable to other electronics applications where flexible circuit boards could be useful.
| Product Size | Sales Percentage in Q4’22 |
| 10-inch and below | 21% |
| 10-to-20-inch | 30% |
| 20-to-30-inch | 14% |
| 30-to-40-inch | 6% |
| 40-inch-and-above | 29% |
