Chimei Innolux (CMI) reportedly has started expanding its LTPS production line as the capacity from the 3.5G plant (originally from TPO Displays) and Tainan plant will not fulfill demand from clients in 2011.

In addition to recent market rumors indicating that Foxconn Electronics (Hon Hai Precision Industry) will acquire over a 50% stake of Japan-based Hitachi Display in order to gain new capacity rapidly, company chairman Terry Gou has been actively visiting the originally TPO's 3.5G plant in Chunan recently.

Market sources believed the main reason for Foxconn to invest in Hitachi is for the IPS (In Panel Switching) technology for producing iPad panels. Hitachi Display is one of the patent owner of IPS technology, and CMI has signed agreement with Hitachi for IPS technology before in order to gain iPad panel orders.

In addition to IPS technology, Japan-based panel makers have more mature technology for LTPS production and capacity, and what is especially important is that the iPad panel production uses IPS technology on an LTPS procedure. Foxconn is expected to gain enough LTPS capacity after its investment in Hitachi and to compete with AU Optronics' (AUO's) 4.5G plant from Toshiba Mobile Display's (TMD's) Singapore subsidiary.

CMI declined to comment on the rumor of Foxconn investing in Hitachi. However, CMI noted noted as LTPS panel demand is expected to surge in 2011, CMI will add LTPS to its annual plan for capacity expansion.

It is understood that CMI has already started capacity expansion for LTPS as its current capacity can't not fulfill the demand from clients, and CMI plans fill out all the empty space at the 3.5G plant with LTPS production lines. The 3.5G plant currently has a monthly capacity of 75,000 substrates per month, and is expected to almost double after the expansion.