TSMC set to shut down so­lar energy oper­a­tions

The China Post - - TAIWAN BUSINESS -

Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. ( TSMC, ), the world’s largest con­tract chip maker, has de­cided to close its loss- in­cur­ring so­lar energy di­vi­sion at the end of Au­gust, say­ing that its so­lar oper­a­tions are “no longer eco­nom­i­cally sus­tain­able.”

TSMC said the charge re­lated to the shut­down of the 100 per­cent owned so­lar energy busi­ness — TSMC So­lar — is ex­pected to cut its third quar­ter’s earn­ings per share by NT$0.07 (US$0.002).

In 2009, TSMC, who is one of Tai­wan’s ma­jor man­u­fac­tur­ers to en­ter the re­new­able energy busi­ness, set up a new busi­ness depart­ment to ex­plore the mar­ket for light- emit­ting diodes ( LED) and so­lar energy prod­ucts.

How­ever, TSMC’s ef­forts failed to pay off. Be­fore the an­nounce­ment to close the so­lar energy busi­ness, the chip maker sold its wholly-owned LED op­er­a­tion — TSMC Solid State Light­ing (

) — to Tai­wan’s based LED chip Epis­tar Corp. ( ) in Jan­uary.

TSMC said that its late en­try into the so­lar energy busi­ness and a lack of economies of scale led to a sub­stan­tial cost disad- van­tage in oper­a­tions par­tic­u­lar busi­ness.

Af­ter care­ful con­sid­er­a­tion, in spite of achiev­ing what the chip maker de­scribed as world-class CIGS ( cop­per in­dium gal­lium dis­e­lenide) thin-film so­lar mod­ule pro­duc­tion tech­nol­ogy, TSMC has de­cided to cease man­u­fac­tur­ing of the so­lar energy busi­ness.

“TSMC con­tin­ues to be­lieve that so­lar power is an im­por­tant source of green energy and that so­lar mod­ule man­u­fac­tur­ing re­mains a ro­bust and grow­ing in­dus­try, but de­spite six years of hard work we have not found a way to make a sus­tain­able profit,”

of

that Chair­man of TSMC So­lar and Se­nior Vice Pres­i­dent of TSMC Steve Tso said in a state­ment.

De­spite the de­ci­sion to close the so­lar energy oper­a­tions, TSMC said that the com­pany will con­tinue to honor all prod­uct war­ranties that have been of­fered to ex­ist­ing cus­tomers. The chip maker will ex­tend em­ploy­ment of­fers to all em­ploy­ees cur­rently work­ing at TSMC So­lar in Tai­wan.

Mar­ket an­a­lysts said that TSMC’s so­lar energy busi­ness is faced with es­ca­lat­ing com­pe­ti­tion from China, where Chi­nese firms are de­voted to in­vest­ing in sil­i­con so­lar cell de­vel­op­ment. China’s sil­i­con so­lar cell de­vel­op­ment has placed great pres­sure on CIGS thin-film so­lar mod­ule de­vel­op­ment, an­a­lysts said, adding that China’s ef­forts to ex­pand pro­duc­tion has led to a sup­ply glut in the global so­lar energy mar­ket.

An­a­lysts said that a plunge in in­ter­na­tional crude oil prices has im­posed an ad­verse im­pact on global de­mand for re­new­able energy.

Af­ter the so­lar energy busi­ness clo­sure an­nounce­ment, shares of TSMC had stayed un­changed at NT$123.50, off an early low of NT$119.50, as of 11:57 a.m.

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