Central Taiwan Science Park Plant Sold to TSMC for NT$38.8 Billion
AUO announced on the 29th that its board approved the sale of its Taichung Phase 2 plant and related facility ancillary facilities to TSMC for NT$38.8 billion excluding tax. The transaction covers 9 building numbers located in Anlin Section, Xitun District, Taichung City, including a Gen-5 plant, a Gen-7.5 plant, cleanrooms and related facility equipment. The registered building area is about 429,000 square meters, equivalent to about 129,800 ping, with a usable area of about 166,000 ping. TSMC stated in a material announcement that it acquired the plant and ancillary facilities for operational production use, with payments to be made in installments under the real estate sale and purchase agreement.
AUO said the transaction price was determined through negotiation with reference to market conditions and professional appraisal reports. AUO commissioned two appraisal firms, DTZ and Tianhe, with valuations of NT$38.750 billion and NT$38.539 billion respectively; the Huaxin and Hanna valuations disclosed in TSMC's announcement were NT$37.3 billion and NT$38.8 billion respectively, all excluding tax, with the final transaction price close to the appraisal results of both parties. AUO estimates that, after deducting related transaction fees and estimated taxes, it can recognize about NT$18.5 billion in disposal gains, with the actual booking timing subject to transaction completion progress and accounting recognition.
NT$19.7 Billion Hwaya Plant Transaction Terminated
Another transaction originally approved by the AUO board on July 28 this year has been terminated. The deal originally planned to sell the Hwaya Technology Park plant in Guishan, Taoyuan and related facilities to Quanta for NT$19.7 billion, covering about 19,700 ping of land, about 49,300 ping of buildings and ancillary equipment. Quanta had originally planned to use the plant for back-end assembly, testing and verification of AI servers, with delivery scheduled for the fourth quarter of 2027 to support AI product order demand from 2028 onward.
After multiple rounds of negotiations, the two sides were still unable to reach agreement on plant specifications and delivery schedule. AUO issued a material announcement today that the disposal case was terminated by resolution of the chairman, while Quanta simultaneously announced the cancellation of the originally agreed transaction. Both sides said the termination has no material impact on their finances or operations. Quanta further explained that the two sides had not yet signed a physical contract, there is currently no change to its capital expenditure plans, related AI capacity plans are unaffected, and capacity arrangements remain on track as originally planned.
Asset Revitalization Comes to a Close, Focus on Use of Funds
AUO Chairman 彭双浪 said at today's online investor conference that the Central Taiwan Science Park plant will continue production for some time, and the administrative procedures required to complete the transaction with TSMC will take until next year at the earliest. With the Central Taiwan Science Park plant sale finalized, the company's existing plant space has reached an appropriate allocation, and asset revitalization has come to a close at this stage. AUO said funds recovered from the plant sale will be invested in strategic and future development projects to support the company's transformation and new business layout.
AUO's third-quarter revenue was NT$66.88 billion, down 5.7% quarter-on-quarter and 4.3% year-on-year; operating net loss was NT$2.37 billion, net loss attributable to parent company owners was NT$2.5 billion, with a loss per share of NT$0.33. With both operating and overall profitability in loss for the quarter, the estimated NT$18.5 billion disposal gain from the Taichung plant transaction is one-time income and cannot be directly equated with an improvement in core operations. Going forward, in addition to the administrative procedures, delivery and recognition schedule for the Taichung plant transaction, the market will focus on how AUO uses the funds to advance its transformation, and how Quanta arranges back-end assembly capacity for AI servers.