In 2016 the Mexico government's subsidies for 23.6-inch TVs will come to an end, which will affect Innolux's LCD panel shipments to the area. However, the company is eyeing prospects in other emerging markets that should be able to counterbalance the losses.

Mexico kicked off a three-year subsidy program that included sbsidies for 23.6-inch LCD TV purchases, and it is set to end in the first quarter of 2016. Innolux and Foxconn Electronics paired up to provide panel supply and manufacturing services for the case, which has since helped push Innolux's 23.6-inch LCD TV panel shipments to 1-1.5 million a month.

BOE also benefited from the deal, shipping around 200,000-300,000 panels a month.

Innolux is now looking to shift shipments to India and Thailand where LCD TV demand is on the rise in addition to 32-inch units that are being sought out from both countries in addition to other emerging countries.

Innolux cuts its 23.6-inch TV panels on 8.5G facilities in addition to 41.6-inch displays. The company will increase utilizations for the 41-inch size to also help offset a potential decline in 23.6-inch TV panel shipmemts.

However, sources at the company noted profits from 41-inch panels have been limited due to decreased pricing for 42- and 42-inch units coupled with rising capacity from makers all over Asia.

Innolux shipped eight million 23.6-inch TV panels in the first half of 2015 and is expected to hit 10 million by the end of the year, the sources added.