The acquisition by Chi Mei Optoelectronics by Innolux over the weekend will heat up the competition between Taiwanese and Korean flat panel manufacturers.
Innolux paid $5.3 billion for Chi Mei putting it ahead of the existing market leader in Taiwan, AU Optronics. And it also puts more power in the hand of Terry Gou, who not only heads up Innolux but is also the founder and chairman of massive manufacturer Hon Hai (Foxconn).
At stake is the lucrative Chinese market for LCD TVs and monitors – a market keenly coveted by the Korean players in the field, Samsung and LG Display.
However, according to Taiwanese wire Digitimes, the acquisition is under investigation for possible insider trading by the Taiwan Stock Exchange.
There had been speculation earlier last week that Chin Mei and AU Optronics were in talks – but it turns out Innolux was the wild card in the pack.
The move will consolidate the supply chain for the LCD TV and monitor market, and may help to bolster prices in the short term.