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M June 29, 2026 11:17 PM GMT

Greater China - Displays | Asia Pacific

Progress for Glass in Advanced Packaging among Panel Makers

We do see the potential of glass panels in semiconductors, as the package size gets bigger - though a more realistic timing for HPC adoption looks to be 2028/2029, in our view.

All eyes on advanced packaging: We think the recent market enthusiasm for panel stocks has centered on the opportunities for glass in advanced packaging. In our deep analysis, Emerging Opportunities for Glass in Advanced Packaging (October 27, 2024), we noted that glass can offer cost advantages from larger dimensions. Moreover, it can provide better electrical performance, leading to lower signal loss, less mismatch of coefficients of thermal expansion among different materials to mitigate the warpage issue, and greater mechanical strength to resist distortion during the manufacturing process or operation.

Innolux appears to be leading the pack: Innolux has been one of the most aggressive players in this area and we believe that it is involved in one foundry's glass core substrate project, where the proof of concept is complete and more verifications will be implemented in coming quarters. Innolux will do the TGVs (Through Glass Vias) process on a glass panel (510mm*515mm), before sending that to Ibiden for substrate processes. For Innolux, the challenges lie in forming TGVs and the subsequent copper plating, because this is not part of the regular display panel production. Our understanding is that Innolux will need to procure new equipment for glass cores; the initial capex might be NT$20-30bn. Last, though Innolux is involved in the early stage development of this technology, we do not rule out the possibility that other players could join later on in the mass production stage, which looks to be in 2028 at the earliest, per our supply chain checks.

BOE is making progress as well: BOE is also interested in leveraging its expertise to tap into the advanced packaging market. Different from Innolux, BOE aspires to finish the whole glass core substrate manufacturing, including the glass core with TGVs and the build-up layers. It has been engaging with domestic and overseas IC designers for verifications. If things move smoothly, it might spend Rmb5bn to build a monthly capacity of 15K substrates (510*515mm) in 2027 and target mass production in 2028.

AUO is focusing on LEO and optical modules: AUO's efforts in this area are less on HPC at this stage; rather, more on the LEO antenna and the CPO modules. On the LEO front, it plans to use glass as a substrate to carry the antenna patterns and RF component for integration with the sunroof in the vehicle. As for CPO modules, AUO and its partners, including Ennostar and Tyntek, are promoting the micro LEDbased CPO architecture for lower costs/power consumption in shorter-distance transmission, where glass could be used as the substrate. Management indicates that it continues to progress on these fronts, though it provides no specific timetable for revenue contribution.

Idea

Morgan Stanley Taiwan Limited+

Derrick Yang

Equity Analyst

Derrick.Yang@morganstanley.com

+886 2 2730-2862

Morgan Stanley & Co. International plc+

Shawn Kim

Equity Analyst

Shawn.Kim@morganstanley.com

+44 20 7677-1018

Morgan Stanley Taiwan Limited+

Vivi Huang

Research Associate

Vivi.Huang@morganstanley.com

+886 2 2730-2860

Sharon Shih

Equity Analyst

Sharon.Shih@morganstanley.com

+886 2 2730-2865

Greater China Technology Hardware

Asia Pacific

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