SAN JOSE, Calif. - Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has approved a plan to invest about $3.8 billion. This includes a move to increase its R&D spending, inject some funding in China and build a solar fab.
As part of the plan, TSMC approved the increase of its 2010 R&D and sustaining capital appropriation to $678.73 million from $534.63 million.
On the fab front, TSMC approved capital appropriations of $1,972.3 billion to expand advanced process technology capacity at its 300-mm plants. It also approved capital appropriations of $369 million to continue construction of Fab 15.
Raising the stakes in the foundry market, TSMC recently broke ground on its previously-announced, new 300-mm fab. The plant, dubbed Fab 15, is located in Taichung’s Central Taiwan Science Park. Construction will be divided into four phases, and total investment over the next several years is expected to exceed NT$300 billion ($9.32 billion). Fab 15 will be TSMC’s third Gigafab, or fab with capacity of more than 100,000 12-inch wafers per month. It will also be TSMC’s second Gigafab equipped for 28-nm technology.
Meanwhile, as part of its capital spending plan, TSMC also approved capital appropriations of $258.1 million to provide specialty technology capacity. In addition, the company approved a capital injection ''of no more than $225 million'' into TSMC China Co. Ltd. It's unclear if the funding is being directed at its 200-mm fab in Shanghai.
It also approved capital appropriations of $319.6 million to develop new businesses, including $101.6 million for a LED production line and $218 million to construct a fab for the production of thin-film solar photovoltaic modules. This is the first time it has talked about building a solar fab.
For months, TSMC has been talking about entering the solar market and related energy businesses. Last year, TSMC approved the appropriation of $50 million for ''possible use'' in investment in solar energy-related areas.
Then, late last year, the company said it would pay NT$6.2 billion (about $192 million) for a 20 percent stake in Motech Industries Inc. (Tainan, Taiwan). Motech is the largest solar cell manufacturer in Taiwan and was one of the top ten manufacturers worldwide in terms of production capacity and output in 2008.
In March of 2009, TSMC (Hsinchu, Taiwan) held a groundbreaking ceremony for an R&D center and wafer fab to develop and make light emitting diodes for lighting applications. The move marks a major change at TSMC which has until this point been focused on the foundry supply of integrated circuits. It will sell the LEDs under its own brand name.
Continuing to expand into new markets, silicon foundry giant TSMC last month made its formal entry into the solar business. TSMC and Stion Corp., a San Jose-based manufacturer of thin-film solar photovoltaic modules, reached a series of agreements covering technology licensing, supply, and joint development.
In addition, VentureTech Alliance, a TSMC affiliate, will invest $50 million to take a 21 percent stake in Stion. Under the agreements, Stion will also license and transfer its thin-film CIGSS technology to TSMC. The technology is reportedly based on copper indium gallium (di) selenide (CIGS) materials.
Leading foundry TSMC recently reported net income of NT$40.28 billion (about $960 million) on consolidated revenue of NT$104.96 billion (about $2.51 billion) for the second quarter ended June 30. Sales were up sequentially by 13.9 percent and up 41.4 percent year-over-year while net income increased 64.8 percent.
I admire TSMC's efforts in LEDs and solar. I just don't understand TSMC's business model in these segments. It will sell LEDs under its own brand name. My guess it will sell a TSMC-branded solar panel.
There are too many LED and solar makers in the market. I doubt TSMC will stand out-or win-in these markets. My guess: They are aiming their wares for the huge China market. Thoughts out there?
The new solar capability should come as good news for the solar industry as it should lead to reduced pricing of components. Ultimately this should be good for the consumer as it should lead to better pricing of energy and easier ability to "go solar" at the home level. Of course it will be awhile before the fab comes on-line, but I suspect there will be some interesting industry impact prior to that as companies attempt to build market share and get long term contracts in place.
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