AU Optronics has completed three asset monetization deals this year, recovering about NT$34.7 billion in total. Fresh market chatter says Taiwan Semiconductor Manufacturing Co. has also made on-site visits to AUO facilities in the Central Taiwan Science Park, with talks said to involve not only the Gen 5 L5C fab and the Gen 7.5 L7A fab, but also possible technical cooperation. AUO’s older Longtan plant has likewise been signaled for sale, though the report says its location makes it less attractive than the CTSP sites.
Three AUO plant transactions brought in about NT$34.7 billion
According to a report by Commercial Times cited in the source material, AUO has been pushing ahead with an asset revitalization plan this year. At the end of July, its board approved two disposal deals in succession.
- A Gen 5 fab in Huaya Technology Park in Guishan was sold back to Quanta Computer for NT$19.7 billion, generating a disposal gain of about NT$13.39 billion. The report described it as AUO’s largest single plant transaction on record.
- A Gen 5 color filter plant in Kaohsiung’s Luzhu Science Park was sold to ASE Technology for NT$6.3 billion, with a disposal gain of about NT$4.28 billion.
In September, AUO’s Singapore subsidiary sold its AFPD plant to Western Digital for about S$350 million, equivalent to roughly NT$8.753 billion. Taken together, the three deals brought in about NT$34.7 billion.
The report says that as the panel sector moves into a mature stage, AUO is using asset sales to free up capital and concentrate resources on higher-value areas such as co-packaged optics, or CPO, and advanced packaging. It also says AUO has stated in several earnings calls that it continues to review the operating efficiency and value creation potential of each plant, and expects more asset revitalization cases in the future.
TSMC is said to have visited L5C and L7A in central Taiwan
The latest market talk cited in the source says TSMC has already conducted site visits to AUO’s L5C Gen 5 plant and L7A Gen 7.5 plant in the Central Taiwan Science Park.
The report describes CTSP as AUO’s core base for large-generation panel fabs, with infrastructure already in place, including cleanrooms, power systems, ultrapure water, and exhaust gas treatment. That setup could support faster integration. In terms of location, L7A sits next to TSMC’s existing CTSP operations, while L5C is adjacent to L7A. If the two sites were linked, the report says they could be folded directly into TSMC’s existing supply chain and workforce management system.
By contrast, AUO’s older Longtan plant, which is also being evaluated for disposal, appears materially less attractive. The report says major potential buyers, including TSMC and ASE, still prefer sites in central and southern Taiwan because of industrial clustering effects and related considerations.
Talks are said to go beyond a property sale
Another key point in the report is that the two sides are also said to be discussing deeper technical cooperation.
One of AUO’s main competitive strengths, the report says, lies in its thin-film process capabilities for large-area substrates, including TFT Array manufacturing, large-area precision alignment, and uniformity control. Those capabilities are described as highly compatible with the process requirements of next-generation fan-out panel-level packaging, or FOPLP.
TSMC’s advanced packaging capacity, including CoWoS and SoIC, remains in short supply, according to the report. FOPLP uses large rectangular panels instead of circular wafers as the base material, which could increase packaging area per run and lower unit costs. The report frames that as a possible next step in advanced packaging.
In August this year, members of the AUO group including Ennostar, Unity Opto Technology, and LandMark Optoelectronics-KY formed a CPO alliance, targeting the light-emission, sensing, and packaging segments respectively. The report says the move is aimed at securing an earlier position in the next-generation advanced packaging supply chain led by TSMC.
Any deal for the two CTSP plants may not close until the second half of next year
The report notes that plant transactions involve negotiations, asset valuation, and certification procedures after transfer to other sites. Outside estimates cited in the report say that even if discussions go smoothly, a formal signing and closing would most likely not happen until the second half of next year.
If both L7A and L5C are sold, the total transaction value would likely set another record and would provide a meaningful boost to AUO’s earnings next year, according to the report.
From an industry perspective, the report says the case would also show that capacity consolidation in Taiwan’s panel industry is extending into generation-7-and-above production lines, while strengthening the strategic role of the Central Taiwan Science Park in the advanced packaging map.