Micron Technology acquires AUO's plant for 1.8 billion yuan to support DRAM capacity expansion.

On August 27, panel company AUO (AUO) announced that it would sell multiple plants of the company and its subsidiary AUO Crystal in Tainan City and Taichung City, Taiwan to storage giant Micron Technology for NT$8.1 billion (currently about RMB 1.808 billion).

It is reported that AUO will sell all three color filter plants C4A, C5D and C6C located in Tainan Science and Technology Industrial Park in this transaction. C5D and C6C have stopped production in August 2023, while the C4A plant, which is still in production, will continue to operate in a sale and leaseback manner. The transaction involves a land area of 87,379.04 square meters, a building area of 146,033.28 square meters, and a total transaction value of NT$7.4 billion. AUO's disposal income is NT$4.174 billion.

In addition, AUO will also sell some buildings and ancillary facilities of its subsidiary AUO Crystal Materials located in the Central Science Park in Houli District, Taichung City. The real estate is adjacent to Micron's Taichung plant, with a total area of 32,500 square meters, a transaction value of NT$700 million, and disposal proceeds of NT$544 million.

AUO sells these factories to focus on its core business and operating strategy. AUO hopes to concentrate resources and energy on more potential and competitive areas by selling idle or discontinued factories.

At the same time, the sale of these factories is also to cope with changes in the market environment. The global LCD market is saturated, and panel demand has entered a flat or declining stage. Continued expansion will only lead to overcapacity and price wars. Therefore, AUO chose to sell some factories to reduce unnecessary investment and operating costs, so as to better adapt to market changes.

Currently, Micron Technology has memory factories in Linkou, New Taipei City and Taichung in Taiwan. These factories are not only capable of producing the most advanced 1-beta nanometer memory, but also have HBM memory advanced packaging facilities. In addition, Micron Technology's Taichung Plant 4 started construction in November 2023 and announced that it will integrate advanced detection and packaging test functions to produce HBM3E and other products.

Micron Technology plans to acquire two factories under AUO, which will be mainly used to expand advanced packaging and high-bandwidth memory (HBM) production lines. Micron Technology said that the acquired plant will be mainly used for front-end wafer testing to support its DRAM production expansion in Taichung and Taoyuan.