From LCD powerhouse to AI enabler: Taiwan's display industry reinvents itself after 30 turbulent years

Taiwan, China's display industry is not in decline—it is executing a capability migration. Two decades of thin-film deposition, large-area uniformity control, and cleanroom operations are being directly transplanted into AI chip advanced packaging, specifically RDL and fan-out processes. The 8.5-gen line process window overlaps significantly with 2.5D/3D packaging substrate manufacturing, meaning conversion capex is a fraction of greenfield fab costs. On compliance, US export controls on advanced packaging equipment are redrawing supply-chain topology. Firms deeply tied to mainland customers like BOE and TCL CSOT face dual pressure on equipment procurement and IP traceability, with operating costs likely rising 15-25%. In the competitive arena, ASE and Amkor hold OSAT client stickiness, but incremental demand for large-format packaging substrates driven by AI inference chips lands squarely in display makers' area-advantage sweet spot. Within 12-24 months, expect at least two Taiwan, China panel firms to qualify AI packaging pilot lines for volume production. Meanwhile, mainland panel giants will lean toward vertically integrated in-house packaging, cementing a bifurcated two-track industry structure.