TSMC reportedly in talks to buy two AUO plants for $930M

TSMC Taiwan Semiconductor Manufacturing Company Limited ↗ 0.95% is reportedly in advanced negotiations to acquire two idle panel plants from AU Optronics in a deal worth more than NT$30 billion (roughly $930 million), according to Taiwan's Economic Daily News. The facilities, designated L7 and L5C, sit in the Central Taiwan Science Park adjacent to TSMC's Fab 15 complex, and would be converted into advanced packaging sites for AI chips.trendforce+1

From Displays to Chip Packaging

The two plants — a Gen 7.5 and a Gen 5 facility — are no longer in active display production for AUO, making them available for repurposing. TSMC intends to use the sites for fan-out panel-level packaging (FOPLP) and its proprietary Chip-on-Panel-on-Substrate (CoPoS) technology, which uses large rectangular panel substrates instead of traditional round silicon wafers. The shift to rectangular panels reduces wasted substrate area and increases the number of chips processed per production run, a critical advantage as demand for AI chip packaging capacity continues to outpace supply.cryptobriefing+1

Reports indicate that TSMC personnel have already conducted on-site audits of the two plants, though neither company has officially confirmed the deal. Both companies declined to comment.trendforce+1

A Familiar Playbook

The reported acquisition would follow a pattern TSMC established in August 2024, when it purchased an Innolux flat-panel plant in Tainan for NT$17.14 billion to expand CoWoS advanced packaging capacity. At roughly double that price tag, the AUO deal reflects the larger scope — two facilities rather than one — and TSMC's accelerating need for packaging infrastructure.businessworld+2

TSMC CEO C.C. Wei has said the company's CoPoS pilot line is under construction, with technology and yields expected to take about another year to mature before customer production begins. Mass production of CoPoS is anticipated by 2028, according to industry sources.trendforce+1

Racing to Meet AI Demand

The urgency behind TSMC's packaging expansion stems from relentless demand driven by companies like Nvidia ↘ 1.93% and AMD Advanced Micro Devices, Inc. ↘ 1.16%, which rely on advanced packaging for their AI processors. FOPLP is increasingly viewed as the next mainstream technology in advanced packaging, enabling heterogeneous integration of multiple chip components into compact, high-performance modules.linkedin+2

Beyond the AUO deal, TSMC is also eyeing the delayed Longtan Science Park expansion in Central Taiwan, where it could eventually build two 1.4nm fabrication plants and an additional panel-level packaging facility.trendforce