What Display Daily thinks: Displays, semiconductors … aren’t they both highly competitive, require large capex investments, and rely on utilization rates to hold steady over a number of years to make them viable?
But, Innolux has the TSMC model to fall back on, a rich tradition of fabless manufacturing that inspires all Taiwanese companies to emulate its success. So it goes with Innolux and while FOPLP manufacturing may not be a slam dunk market to jump into, there’s merit in a display maker finding its own niches.
Deprecating old LCD fabs is costly and emotionally traumatic, in so far as a corporation can feel any trauma, but restructuring around core infrastructure makes a whole lot of sense, and everyone in the display industry is doing it. It just looks like Innolux has a good story to tell here. Whether that translates into big profits and sales remains to be seen. We have a few years to wait. At least the company’s enthusiasm is boundless for its move into the IC packaging business.
Innolux Converting Old Display Fabs Into New FOPLP Plants
FOPLP stands for fan-out panel level packaging. It can integrate heterogeneous dies/components at the panel level in a single package. This allows for greater functionality and thinner packages.
It uses redistribution layers (RDLs) and a molding compound to fan-out the inputs/outputs of dies to a larger panel-format, which enables more inputs/outputs. Compared to other packaging approaches, it enables greater miniaturization and thinner profiles as well as improved electrical/thermal performance. It is seen as a cost-effective, high-density integration technology platform for products like smartphones, IoT devices, automotive, etc.
Over the last few months, InnoLux has been promoting its conversion of a Gen 3.5 to FOPLP and announcing that it will also be gradually transitioning a Gen 5.5 line, as well. It has an existing customer for its FOPLP technology, being used in medical sensors for Radiant Opto Electronics in Taiwan. The whole process began in 2019, and in the meantime, Innolux has been perfecting its FOPLP technology to find advantages that could help it transition into being a semiconductor player, as much as it is one in the display industry.
The FOPLP market is dominated by large semiconductor companies, but this move by Innolux seems more tactical, trying to find new market opportunities for the company outside of displays, while also making gradual investments in new manufacturing that evolves from existing infrastructure. Innolux sees its niche play in FOPLP as contributing better gross margins and having legs to grow in volume with increasing demand for more IoT devices.
