Wed, Jan 12, 2011 - Page 12 News List

TSMC and Centrosolar ink deal

DIVERSIFYING:The agreement calls for Centrosolar to supply TSMC with a module capacity of 100MW a year, as the latter turns to renewable energy to boost growth

By Lisa Wang  /  Staff Reporter, with Bloomberg

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday said it has inked an agreement with Centrosolar Group AG, making the Munich-based rooftop solar system supplier TSMC’s only European crystalline solar module maker.

That would represent another step by TSMC after the chipmaker diversified into the green energy industry about two years ago.

Under the agreement, -Centrosolar will supply TSMC with an initial module capacity of 100 megawatts (MW) a year, using solar cells made by the Hsinchu-based chipmaker, according to a company statement.

“We are delighted to have this opportunity to work with Centrosolar and to offer a true premium module as our first product and we look forward to closer collaboration in the future,” said Chao Ying-chen (趙應誠), senior director in charge of TSMC’s solar PV business.

Centrosolar will build up the capacity required for this agreement in a new production building adjacent to its plant in Wismar, Germany, and the first deliveries are due in the third quarter this year, TSMC said.

Centrosolar said it would spend about 20 million euros (US$25.9 million) on a first 150MW expansion in a new production hall and warehouse in Wismar, Kirsch said.

The companies are also in talks for the possibility of further collaboration in product development and process engineering.

“This agreement with Centrosolar complements our efforts in developing thin-film solar products, as it allows us to address a broader range of market segments and serve our European customers together with another trusted name,” Chao said.

German solar product makers, including Q-Cells SE, have opened factories in Asia to reduce labor and operating expenses and to try to match prices offered by Chinese competitors. TSMC may benefit from moving production closer to prospective clients as it turns to renewable energy to boost growth.

“Modules can be made competitively in Germany and there is demand,” Centrosolar chief executive Alexander Kirsch said yesterday in a call with reporters. “It takes six weeks for shipments from Asia to reach Europe. That costs money, but in a changing market it’s also a disadvantage.”

The agreement with TSMC is a “strategic alliance” and Centrosolar hasn’t discussed being acquired by TSMC, Kirsch said.

“This was always a technical cooperation in specifically defined areas and it’s staying at that,” he said.

TSMC said in September last year it would spend US$258 million in the first phase of a plan to make solar modules. The company will begin volume production at a plant in Taichung next year, TSMC said.

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