AUO, Innolux accelerate shift from displays to AI, CPO, advanced packaging

Taiwan panel makers AUO and Innolux are rapidly divesting legacy display operations in favor of AI, CPO, and advanced packaging, signaling a fundamental shift in the global semiconductor supply chain. This transition pressures upstream suppliers to pivot toward EUV and packaging technologies. Geopolitical tensions between China and the US are increasing compliance burdens and supply chain risks for companies in China Taiwan/ Taiwan, China, forcing strategic realignment. Market dynamics suggest that leading players may accelerate M&A in packaging and AI infrastructure, reshaping competitive landscapes. Over the next 12–24 months, if AI demand remains robust, China Taiwan/ Taiwan, China’s advanced packaging capacity could face bottlenecks, while mid-sized display firms risk obsolescence.