TSMC spins off solar, LED units

TSMC is carving away its nascent business units for solar PV and solid-state lighting as new subsidiaries, to help promote their “specialization” and “strengthen overall competitiveness and operational efficiency.”

April 28, 2011 – TSMC will transfer its new high-growth businesses in solar and solid-state lighting into two new wholly-owned subsidiaries. The solar business, TSMC Solar, will be capitalized at up to NT$12.5B (US ~$433M), with the LED business at up to NT$2.8B (~$97M).

Structuring the two units also gives them a greater sense of responsibility and “entrepreneurism,” explained chairman/CEO Morris Chang, in the company’s 1Q11 financials conference call. Instead of reporting to the TSMC board, they’ll both be under the direct supervision of Rick Tsai as a chairman/CEO. But as the owner, TSMC “will maintain a very firm connection with the companies,” including having two board members (in addition to Tsai).

The units also have an eventual exit strategy: IPO “in a few years,” once they’ve achieved profitability or are about to reach it, he added. It’s too early to peg any near-term revenue targets, but Chang suggested longer-term goals (~10yrs) “we expect them to be billion-dollar size — each of them.”

TSMC first started hinting at a desire to get into solar PV back in 2009, calling it “a very long-term” interest in both c-Si and thin-film. It has since established investments and partnerships with Motech, Stion, and Centrosolar. In September 2010 TSMC broke ground on a thin-film (CIGS) fab in Taichung next to its forthcoming Fab 15 gigafab; the facility shell has been completed and equipment move-in equipment has begun, reports Digitimes.

For LEDs, TSMC is now piloting production in a wafer fab in the Hsinchu Science Park with 8-12 MOCVD tools, and company-held VisEra Technologies is offering packaging and test services, reports the Taiwan Economic News.