TSMC set to shut down solar energy operations
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,”
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.