Chimei Innolux to Set Up Touch Panel Company in China

Taipei, Dec. 21, 2010 (CENS)--Chimei Innolux Corp., affiliated with Taiwan-based Hon Hai Group and focusing on production of display panels, has decided to invest US$20 million to establish a subsidiary dedicated to production of touch panels in China, as Hon Hai Group's strategic move to enhance business deployments in the segment, according to the firm.

Explosive popularity of smartphones and tablet PCs has made industry insiders increasingly worried about possible shortages of touch panels in the coming years. To ensure sustainable development, Chimei Innolux has decided to set up the subsidiary in China to boost its touch panel business.

Industry insiders noted that the subsidiary, wholly owned by Chimei Innolux, will be engaged in production of touch panels and related components, helping the Hon Hai Group to accelerate supply chain integration for the stellar products.

They furthered that with the subsidiary joining its supply chain, the Hon Hai Group will secure more stable supply of touch panels than now, and therefore can cushion the impact of touch panel price hike and keep cost down in the future, especially when deficient supply is seen in the industry. From another viewpoint, the subsidiary, backed by Hon Hai Group's huge customer base, is also expected to quickly emerge in the line to challenge TPK Holdings Co., the largest Taiwanese touch panel maker by capacity.

In the meantime, Chimei Innolux has seen its production lines for small and medium-sized display panels fully booked by contract orders for touch models in recent months, and forecast that its supply won't meet customer's demand until it finishes capacity expansion. Therefore, establishment of the subsidiary in China is key to the firm's touch panel business.

In addition to the subsidiary, Chimei Innolux has also announced another investment valued at US$3.28 million in boosting output of touch modules, showing its determination to compete in the segment.