Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, said its board had approved a plan to allocate US$50 million for possible investment in solar energy, the latest development in the chipmaker’s search for new growth engines in the green energy industry amid the slowing semiconductor sector.
To facilitate its expansion into green business, TSMC chairman and chief executive Morris Chang (張忠謀) told reporters in June that the company would not rule out securing green energy technologies and talent via mergers and acquisitions.
At the time, Chang said the new businesses would be “an important thrust” for TSMC as the overall semiconductor industry could see a 5 percent composite annual growth rate from last year through 2018 rather than the double-digit percent growth seen before.
The contract chip manufacturing business could see a slightly better growth at 6 percent.
New green energy businesses could help increase TSMC’s revenue growth, Chang said.
On July 30, Chang said the new businesses could generate revenues of US$10 billion, or US$15 billion by 2018, rather than US$2 billion he had forecast earlier.
Yesterday, speculation circulated that local solar-cell maker Neo Solar Power Corp (新日光能源) was an investment target for TSMC.
Neo Solar was not available for comment yesterday.
Neo Solar shares opened 3.57 percent higher yesterday after the local Chinese-language newspaper Commercial Times reported that TSMC could consider purchasing a major stake in Neo Solar from money-losing PC memory chipmaker Powerchip Semiconductor Corp (力晶半導體).
Hsinchu-based Powerchip and its investment arm own about 11.76 percent, or 18.85 million shares, of Neo Solar, which has 160.28 million in capital shares, information posted on the Industrial Development Bureau’s Web site showed. Based on Neo Solar’s closing price of NT$42 yesterday, the deal could amount to NT$792 million (US$24.1 million).
Neo Solar intends to issue 30 million common shares later this year to raise capital for new facilities and manufacturing equipment.
“Our checks suggest the acquisition is likely,” Andrew Lu (陸行之), a semiconductor analyst with Citigroup, said in a report released yesterday.
“If the acquisition goes through, TSMC could suffer short-term pain as Neo Solar was running a net loss,” he said.
Neo Solar registered losses of NT$425 million in the first quarter on oversupply. The four-year-old solar cell maker made NT$831 million in net profits last year.
Speculation surrounding the acquisition may have been the result of Neo Solar chairman Quincy Lin’s (林坤禧) close links to TSMC. Lin used to be a vice president of TSMC’s marketing and sales division, and held other positions in the corporate development and supply chain management departments, the Neo Solar Web site showed. Lin also helped TSMC establish its European and Japan units.
Former TSMC chief executive Rick Tsai (蔡力行) was appointed to lead a team to explore new business opportunities and TSMC said he has visited many solar companies in Taiwan and abroad since June.
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