Taiwanese Electronic Firms Make Inroads in Green Energy

The global green-energy market is expanding at a vigorous pace, and several electronic firms in Taiwan are jumping into green energy in a bid to profit from the resulting business opportunities. More are sure to follow.

Lite-On Green Technologies, a member of the Lite-On Group, for instance, recently landed orders for the installation of two solar power stations in Germany, a 1.25 MW (million watts) system for the European Cup stadium and a 0.821 MW plant for the Michelin Co. Lite-On Green Technologies has also secured a license to operate the former facility following its completion in the first half this year, and will be able to sell excess electricity to the local power grid at government-subsidized rates.

It was founded only in 2008, but Lite-On Green Technologies has already made major gains in the Chinese market. It has landed over 20 solar power station projects there, mostly in cooperation with municipal governments, in such places as the cities of Nanjing and Changzhou as well as the provinces of Jiangxi and Guangxi.

The recent German orders mark another major breakthrough for the company, which won a contract to build a 2MW solar power station for IKEA in Belgium last September-the first large overseas solar power station project ever to go to a Taiwanese firm. That facility has already begun operating.

Song Gongyuan, chairman of the Lite-On Group, predicts that Lite-On Green Technologies' total orders will reach 30-50 MW this year, compared with just 5MW in 2009. The total capacity of facilities completed by the company is expected to surpass 15MW by the end of the year, up from 2.5MW last year. Institutional investors estimate that the company's revenue will top NT$2 billion (US$62.5 million) this year, five times the 2009 level.

TECO Electric & Machinery, Taiwan's leading motor maker, has also made a strong foray into green energy by developing wind turbine generators. The company achieved a major breakthrough recently when it completed the development of a large 2 MW wind turbine employing its own technology, making Taiwan the eighth nation in the world capable of producing such equipment. The wind generator, carrying a price tag of NT$100 million, will be shipped to Zhangzhou, in China's Fujian Province, by the end of the year.

TECO developed the wind turbine in cooperation with a number of other domestic firms, including Formosa Heavy Industries (responsible for the development of the accelerated gearbox), China Steel (large casting parts such as axles and tower gantries), and Atech Composites (blades).

The China sale is TECO's first step in tapping the wind-turbine market on the other side of the Taiwan Straits, which is worth an estimated NT$400 billion (US$12.5 billion) a year. The company has actually been in the wind-turbine business for several years and has secured orders for over 50 of the machines; some are contract orders placed by Daewoo of Korea, for shipment to Chile. In addition to producing wind turbines, TECO also plans a move into wind-farm management.

The Fortune Electric Co., which has established a solid foothold in the wind-power market, recently extended its reach into solar power by winning a bid to build a 4MW solar-power system for a solar-power station being built by the state-run Taiwan Power in Yongan, in the southern Taiwan county of Kaohsiung. In 2009 the company's production of power transformers for wind-power plants generated revenues of NT$1 billion (US$31.3 million), accounting for one eighth of its total turnover of NT$8 billion (US$250 million). With the new contract, that ratio is sure to rise.

Other local electronic firms are also jumping onto the green-energy bandwagon. Most notable is the Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract IC maker, which has procured a 20% stake in Motech Industries, Taiwan's leading solar-cell manufacturer. Backed now by Motech's manufacturing strength, TSMC is setting its sights on the market for solar-power stations.