February 6, 2018 10:29 pm JST

Foxconn unit to cut over 10,000 jobs as robotics take over

Taiwan's Innolux upbeat on mini LED display that can be used in cars

CHENG TING-FANG, Nikkei staff writer

Foxconn’s display-making affiliate Innolux said it would cut workforce by at least 16% this year as it introduces artificial intelligence and more automation to its factories.

TAINAN, Taiwan -- Foxconn's panel arm Innolux is planning to slash more than 10,000 jobs this year as part of the company's aggressive efforts to increase the use of automation in manufacturing, said Honorary Chairman Tuan Hsing-Chien on Tuesday.

"We will reduce our total workforce to less than 50,000 people by the end of this year, from some 60,000 staff at the end of 2017," Tuan said in a press conference.

Innolux is a liquid crystal display-making affiliate of major iPhone assembler Hon Hai Precision Industry, better known as Foxconn Technology Group. Tuan is also a technology adviser to Foxconn, Sharp and Innolux.

Tuan said up to 75% of production will be fully automated by the end of 2018. Most of Innolux's factories are in Taiwan.

Tuan's pledge came a few days after Foxconn Chairman Terry Gou said the company would pour in some $342 million to overhaul its manufacturing process by using artificial intelligence.

Tuan Hsing-Chien, former chairman of Innolux, is currently a technology adviser to Sharp, Innolux and Foxconn. (Photo by Cheng Ting-Fang)

Innolux does not sell to Apple but supplies TV, notebook, monitor and smartphone displays to a wide range of customers including HP, Dell, Samsung Electronics, LG Electronics, TCL, Hisense, Panasonic, Hitachi and Sharp.

As other major display makers such as LG Display, Japan Display and China's BOE Technology Group are eager to churn out organic light emitting diode, or OLED, displays that are chiefly made by Samsung Electronics currently as they hope to gain orders from Apple. But Innolux said it would not compete in such a crowded market.

OLED provides sharper color contrast and a brighter display compared with LCD. More importantly, OLED panels can be molded into curved screens and possibly made foldable. Apple's most premium phone iPhone X uses OLED screens and there are expectations that up to two new iPhone models will also be equipped with OLED panels.

Innolux is working on a new type of display, called active matrix mini LED, or AM mini LED, according to Executive Vice President Ting Chin-lung. These can offer almost all the advantages that OLED screens do, including better contrast and flexibility that allow them to become foldable.

Ting said his company was currently talking with automakers to use mini LED for in-car displays, as OLED which is sensitive to temperature changes could be too vulnerable for such applications. But it will still take as long as two years for such technology to bring substantial revenue, Ting said. He added that mini LED could later be developed into Micro LED, an even more advanced display technology that Apple also requires. 

Boyce Fan, an analyst at Taipei-based research company WitsView, said mini LED is currently more expensive than OLED, so it would be hard for Innolux to compete in the consumer electronics such as smartphones that require large quantities of those units.

"We do agree that the performance of mini LED can rival with OLED and its durability could be better than OLED, but the cost is still too high ... The target market could be first limited to automotive displays and premium monitors for PCs or notebooks," said Fan.

For all 2017, Innolux's revenue increased nearly 15% to 329.17 billion New Taiwan dollars ($11.22 billion) from a year ago.

Both Innolux and Hon Hai shares were unable to escape the selling pressure on Tuesday, as they dropped by 4.9% and 3.9%, respectively, but they were marginally better off than the benchmark Taiex index's decline of 5.0%.

Asia300

Innolux Corp.

Taiwan

Market(Ticker): TAI(3481)
Sector:
Industry:
Electronic Technology
Electronic Components
Market cap(USD): 4,434.87M
Shares: 9,952.07M
Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 51,637.83M
Shares: 17,328.73M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 325,399.98M
Shares: 146.45M
Asia300

LG Electronics, Inc.

South Korea

Market(Ticker): KRX(066570)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 15,712.51M
Shares: 163.64M
Asia300

TCL Corp.

China

Market(Ticker): SHE(000100)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 7,328.30M
Shares: 13,514.97M

Panasonic Corp.

Japan

Market(Ticker): TKS(6752)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 37,956.10M
Shares: 2,453.05M

Hitachi Ltd.

Japan

Market(Ticker): TKS(6501)
Sector:
Industry:
Producer Manufacturing
Industrial Conglomerates
Market cap(USD): 37,845.23M
Shares: 4,833.46M

Sharp Corp.

Japan

Market(Ticker): TKS(6753)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 20,077.66M
Shares: 613.28M
Asia300

LG Display Co., Ltd.

South Korea

Market(Ticker): KRX(034220)
Sector:
Industry:
Distribution Services
Electronics Distributors
Market cap(USD): 10,189.30M
Shares: 357.81M

Japan Display, Inc.

Japan

Market(Ticker): TKS(6740)
Sector:
Industry:
Electronic Technology
Electronic Components
Market cap(USD): 1,241.12M
Shares: 601.41M
Asia300

BOE Technology Group Co., Ltd.

China

Market(Ticker): SHE(000725)
Sector:
Industry:
Electronic Technology
Electronic Equipment/Instruments
Market cap(USD): 30,065.06M
Shares: 34,798.39M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.