When Motech Industries Inc (茂迪) chief executive officer Chang Ping-heng (張秉衡) made his debut as a solar industry rookie during an investor conference on April 29, his precise observation about the solar industry impressed most investors, winning their support.
It was unthinkable that Chang had just been in his new post for four weeks at that time, as he had already detected the growing difficulty of supply chain management that faced most solar company executives.
Prior to his new position, Chang was in charge of materials and risk management at the world’s top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), where he had been working for 10 years since 2000.
“For a solar virgin, Chang already has good control of the development of the company and the solar industry so far,” said an analyst who attended the investor conference, but declined to be named. “With his managing experience at TSMC, he should be able to help Motech grow further. Motech needs an experienced leader to manage risk, which could rise along with its fast expansion into the whole supply chain of the solar industry.”
Chang received a doctorate in materials engineering at Purdue University in 1981. Before working at TSMC, he and Richard Chang (張汝京) co-founded chipmaking company Worldwide Semiconductor Manufacturing Co (WSMC, 世大) in Hsinchu in 1998, when Taiwan’s semiconductor industry was booming.
When WSMC was acquired by TSMC in 2000, Chang Peng-heng chose to stay with TSMC, while Richard Chang left Taiwan and later founded China’s biggest chipmaker, Semiconductor Manufacturing International Co (中芯).
In January, TSMC became a new shareholder of Motech after purchasing a 20 percent stake in the nation’s biggest solar cell maker for about NT$6.23 billion (US$196.1 million).
TSMC chairman Morris Chang (張忠謀) hand-picked Chang Ping-heng — who loves playing basketball, jogging and mountain climbing — to help Motech expand into a solar conglomerate from a solar cell maker.
With years of managing experience and expertise in materials science, Chang Ping-heng easily won the approval of Motech’s board on March 8 to become the company’s new chief executive officer.
Tainan-based Motech started out as an electronic meter test and measurement equipment maker in 1981, before branching into solar cell production in 1999. Under the leadership of chairman Simon Tsuo (左元淮), Motech is accelerating vertical integration plans, including the acquisition of GE Energy’s solar module plant in the US and forming a joint venture with Japan’s Itogumi Construction Co.
However, Tsuo lamented that Taiwanese solar cell companies were too small to compete with their global rivals because they lacked support from the government, big corporations and the home market.
“We are just little-league players,” Tsuo said.
Things are changing, however. With Chang’s management experience and financial and technological support from TSMC, Motech may be closer to its dream of becoming a “major league player” in the solar industry as some analysts anticipate.
Moreover, analysts said Chang Peng-heng’s expertise in materials science would help improve Motech’s cost structure and gross margin, which rebounded to 14.7 percent in the first quarter of this year from 12.8 percent in the previous quarter and 3.5 percent from a year ago.
Coming from a prestigious company with strong corporate governance, he clearly knows how to play his role properly.
“I don’t represent TSMC ... I work for the interest of Motech’s shareholders,” he told investors on April 29.
However, unlike most other solar executives, Chang Ping-heng did not totally embrace widespread optimism when giving his outlook on Motech and the solar industry as a whole.
Chang Ping-Heng was critical, expressing his concern that over-optimism could cause overcapacity in the second half of the year, at a time when the industry is recovering from last year’s recession-induced slump.
“The equipment [that has been] booked showed that capacity is growing faster than demand,” he said. “And transparency in the solar photovoltaic industry is relatively low, compared to the semiconductor industry.”
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