SAN FRANCISCO -- The world's largest chip contract manufacturer is making good on its long-announced plan to enter the solar market with its own production lines. Taiwan Semiconductor Manufacturing Corp. (TSMC) announced Thursday it's outfitted its first solar factory with equipment and plans to begin shipment in the first quarter of 2012.
The factory, called S-Fab, will have an initial capacity of 100 megawatts, said TSMC, which is running its solar business through — what else? — TSMC Solar. The first phase of the factory plan is to build 300 megawatts of annual capacity, which will require $258 million to complete. The long-term plan is to boost the capacity to 1 gigawatt by 2015.
The fab will use the technology from Stion, a Silicon Valley startup that develops thin films using copper, indium, gallium and selenium (and a bit of sulfur), said Frank Yang, director of business development at Stion. TSMC forked over $50 million to sign technology licensing agreements and buy a 21 percent stake in Silicon Valley startup Stion in 2010.
TSMC started in 1987 and rose to prominence when building chip factories became too expensive for young companies in Silicon Valley and elsewhere. The company hopes to take its expertise in mass-producing the more complex processor technologies and use it in solar. The company began publicly discussing its solar ambition and looking for solar investments in 2009. Sure enough, by the end of 2009, TSMC announced it had spent $193 million to buy a 20 percent stake in Motech Industries, a silicon solar cell maker in Taiwan.
TSMC is betting that CIGS technology will play a big role in the solar market as well, and it lined up Stion to help it skip the often long and cost process of developing its own CIGS know how. CIGS thin films have yet to conquer the solar market, though there is no shortage of players trying to do that.
Aside from Stion, other small CIGS manufacturers that have only recently enter mass production or are about to do so include Nanosolar, MiaSole, Solibro (part of Q-Cells) Global Solar Energy, SoloPower and HelioVolt. Some of them have less than 100 megawatts of production capacity, while a few of them have surpassed the 100-megawatt mark.
Solar Frontier in Japan stands alone as a giant in the CIGS world with its 900-megawatt factory that began running earlier this year.
Other large companies harboring the ambition to be major CIGS solar players include Hyundai Heavy Industries, the big shipbuilder in Korea, that announced a plan last year to build a 400-megawatt CIGS solar cell factory in its homeland with a French partner, Compagnie de Saint-Gobain, through a joint venture called Hyundai Avancis. Korea’s industrial giant SK Group also is interested in the CIGS technology and recently pumped $50 million into HelioVolt in Texas.