Jibang Consulting: Taiwanese panel production capacity continues to shrink, and the global LCD panel supply and demand pattern will be reshaped

The Zhitong Finance App learned that according to TrendForce Jibang Consulting's latest panel industry analysis, it is estimated that by 2028, the total supply share of Innolux (Innolux) and AUO (AUO) in LCD panels will fall below 10%, while the supply of LCD laptop panels will continue to decrease to nearly 20%. As LCD TV panels remain profitable, the estimated supply ratio will remain around 22%. The recent series of production capacity convergence and asset revitalization actions by Taiwanese manufacturers will not only revolutionize the corporate structure, but will also become a key variable influencing the future reshaping of global LCD TVs, monitors, and laptop panels.

Innolux's old plant is expected to transform into advanced packaging

Innolux plans to close the Fab3 production line, which mainly focuses on LCD laptop panels, from the end of 2027 to 2028. LCD production capacity for notebook computers will be withdrawn from the mainstream market in an orderly manner over the next few years. This is partly because 8.6-generation OLED production lines have been launched one after another, and the penetration of OLEDs for notebook computers has accelerated, causing the existing LCD laptop panel market to face structural pressure in terms of price and demand. On the other hand, Innolux has made progress in FOPLP, CPO, and TGV glass drilling technology, and it is not ruled out that the Fab3 base will later develop in the direction of integrating advanced packaging and high-value applications. It is estimated that this move will enhance the defense of the Taiwanese factory's overall operating structure and reduce the risk of continuing to fall into a price war.

Whether AUO funds are transferred to micro LED, AI/CPO, etc., is the key to further converging old production lines

Another major manufacturer, AUO, is transferring capital to high-value-added advanced packaging technology such as Micro LED and AI/CPO. Recently, it has been announced successively that the Taoyuan Huaya Plant and Kaohsiung C5E Plant will be sold to Quanta (Guangda) and ASE (Sun Moon Light) respectively in order to accelerate the transformation.

According to TrendForce Jibang Consulting's analysis, the Huaya plant covers two L3D and L5D plants and is expected to close in the first half of 2027. L3D was originally the main production base for Garmin smart hand panels, and will move to other production lines after closure; L5D mainly focuses on automotive, industrial control, and medical panels. After closure, related production capacity will be transferred to L6B and L6A production respectively. As Open Cell's production capacity converged, AUO also decided to sell the C5E plant that produces color filters (Color Filters) at the same time.

TrendForce Jibang Consulting determined that under the trend of mainland LCD panel manufacturers actively expanding the laptop panel market share and demand continuing to shift to OLED, in addition to the announced factory area, whether AUO's next step is to seek buyers for older generation lines (such as L5C or L6A) that mainly produce LCD laptop panels, which is the focus of follow-up market observation. If the L5C is sold, it is not ruled out that the L7A located in the same factory area will also be released, which will have a profound impact on the global display industry pattern at that time.

Take the lead and launch the whole body to discuss the future supply and demand layout of the three panel applications

Analyzing subsequent TV panel supply and demand market conditions, LCD TV panel supply will enter a “tight health” trend from 2026 to 2030 in the absence of investment in new production lines and demand continues to expand. If AUO sells L7A, the global LCD TV panel supply area will be reduced by about 2.1%, making the supply and demand situation even more tight.

In the display panel market, it is estimated that the top three panel manufacturers in mainland China will account for 74% of the LCD panel supply market in 2026. Coupled with LGD continuing to converge LCD products and switch to OLED, the relationship between LCD panel supply and demand will gradually stabilize in the future. If AUO shuts down L6A, the global supply of LCD panels will be reduced by nearly 5 million. At that time, it will not only have a significant impact on supply and demand, but it will also be possible to observe whether more 8.6-generation OLED manufacturers are willing to invest resources to develop display products, thereby increasing penetration rates.

As for the laptop panel market, as key brands switch to OLED in the future, the OLED penetration rate will rapidly increase, further increasing the adjustment of supply and demand in the LCD laptop market. TrendForce Jibang Consulting pointed out that it will be an inevitable trend for panel manufacturers to close the factory area that mainly produces LCD laptops. The sale of the L5C/L6A factory will not only reduce the loss pressure of subsequent AUO, but also improve the overall pattern of imbalance between supply and demand in the LCD laptop panel market.