Foxconn Electronics will collaborate with Innolux to invest roughly US$2.8 billion to construct new 6G facilities in Taiwan geared at producing LTPS technology for high-end smartphones.

The line is expected to go into production in April 2016 with monthly production initially reaching 24,000 substrates. Approximately 2,000 staff will be employed at the new facilities, commented Foxconn chairman Terry Gou.

The facilities will be used to meet specialized client demand said representatives at Innolux, which various newspapers in Taiwan and China are reporting to be Apple.

Both Innolux and Foxconn did not specify on how much each will put up for the initial investment and that a decision still has to be made by the companies' boards.

Innolux president JC Wang commented that Innolux currently holds a 22% share in the global TV panel market, leading neck and neck with Samsung Display. Innolux also holds a 22% share in LCD monitor panel shipments, behind LG Display's 24%, and a leading notebook panel share of 25%. However, in terms of smartphone panel applications, Innolux holds an 8% share behind Samsung's 14% share and Sharp's 10%.

Wang added Innolux runs two 8.5G lines - Fab 8A and Fab 8B - in Kaohsiung, southern Taiwan. Fab 8A has ramped up production, while Fab 8B has been sitting idle. According to Wang, Innolux had looked at the options of continuing to expand its 8.5G capacity or devoting more efforts to producing high-end small- to medium-size applications. Its conclusion was to give priority to small- to medium-size applications.

The Kaohsiung 8.5G lines have a monthly production capacity of 80,000 substrates with a yearly output value of NT$54 billion (US$1.75 billion). The new 6G facilities are expected to bring yearly output value of NT$80 billion.

Overall, Innolux estimates the investment will reach between NT$80-90 billion, with front-end TFT production investmens valued at NT$70 billion. However, back-end production facilities costs might bring the total investment amount to as high as NT$100 billion.