Largest LCD maker to rise in Taiwan

Chi Mei Optoelectronics or CMO and Innolux have agreed to consolidate their resources to create Taiwan’s largest fl at-panel display maker, Chimei Innolux. The new company gets one share from Innolux for every 2.05 share that CMO puts in.

Once the deal is finalized in May 2010, Chimei Innolux, valued at more than $5 billion, is forecast to overtake AUO as the island’s biggest maker of LCD panels.

The merger combines CMO’s large FPD manufacturing capability and Innolux’s factories, which emphasize partial and fully assembled displays that are used in TVs and computer monitors.

The move will also strengthen the two companies’ vertical integration. CMO’s subsidiaries include suppliers of key panel components such as driver ICs, polarizers, LED and CCFL backlight modules, LED packaging and various film filters.

Innolux, on the other hand, boasts in-house production of color filters, and backlit and touchscreen displays.

Tainan-based CMO has the frontend of the manufacturing process, while Innolux of Miaoli takes care of the back-end, HC Tuan of Innolux said. Tuan will be appointed president and CEO of the new company, with CMO‘s Frank Liao as chairman.