TSMC Mulls Spinning Off Green Energy Business Units

Taipei, Feb. 16, 2011 (CENS)--Silicon foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC) is planning to spin off its solar-energy and light emitting diode (LED) business units into independent subsidiaries sometime in the second half of this year.

According to the company's spokesperson and chief finance officer, Lora Ho, TSMC is seriously evaluating the plan “based on strategic needs” to organize the two business units into independent subsidiaries wholly owned by TSMC.

People familiar with the plan pointed out new names for the planned two subsidiaries would be “TSMC Solar” and “TSMC LED.” They estimated total capital for the two subsidiaries at NT$10 billion (US$344.8 million at US$1:NT$29) in the initial stage.

TSMC set up a new business development organization in March 2008 to handle investments in green-energy business including LED and solar energy. It has put over NT$12.5 billion (US$431 million) into the business.

TSMC has set green-energy business as its another growth driver besides silicon foundry over next few years, helping the company achieve the goal of increasing revenue at compound annual rate of 10% between 2011 and 2015. Its chairman and chief executive, Morris Chang, once said that the company's green-energy business would generate revenue of up to US$2 billion in 2018, accounting for around 15% of TSMC's 2010 revenue of NT$419.5 billion (US$14.4 billion).

TSMC's director of corporate communication division, Elizabeth Sun, pointed out that the company won't rule out listing the two subsidiaries on the local bourse so that all of their employees will have a goal to strive for.

Industry executives expected TSMC to invite Y.H. Zou, incumbent chairman of Motech Industries Inc., to head the solar subsidiary and put its LED subsidiary under stewardship of two former executives each from Epistar Inc. and Foxsemicon Integrated Technology Inc. Motech is a leading supplier of solar modules in Taiwan, in which TSMC holds stakes, while Epistar and Foxsemicon are two of Taiwan's LED players.

Some estimated that TSMC's spin-off projects would further heat up competition among Taiwan's LED conglomerates for not only market share but also for capital and talents.