Taiwan's TSMC makes a late but smart entry into Solar Energy;Buys Equity Stakes in Stion and Motech

Taiwan Companies Ramping up their Solar Plans

Taiwan based semiconductor company TSMC ( Taiwan Semiconductor Manufacturing Corporation) is getting serious about investing in Solar Energy.Other Taiwanese Heavyweights like AUO,CMO and UMC are also in the process of ramping up their solar production plans.The European Crisis and the fall in Euro has led to a dramatic fall in stock prices of global solar companies like Sunpower,Suntech,Trina Solar and others.This has led to increased JV and M&A Activity in the Solar Industry with AUO recently announcing a billion dollar investment with Sunpower.AUO which is primarily a LCD company is combining its manufacturing expertise with Sunpower’s solar technology to set up a massive solar fab in Malaysia. Chi-Mei,AUO’s main LCD competitor in Taiwan had set up a thin film plant without much success.AUO’s M.Setek acquisition earlier had also not got much success as a fall in poly and wafer prices put the whole Solar Upstream sector in a pickle.UMC,the world’s second biggest semiconductor foundry after TSMC has also made small investments into solar production.

Taiwan’s company are being driven into Solar Energy as Green Industry continues to attract global companies through its high growth potential.Conglomerates like Samsung,NEC,Hyundai,LG,Toshiba are following leaders like GE and Siemens in making a big push into the Green Energy sector.These conglomerates are in fact a good Low Risk approach for investing in the Green sector.Taiwan’s companies with their semiconductor and LCD manufacturing expertise have an advantage as Solar Thin film and Crystalline Technology has similar production processes.There have been no major Taiwanese Solar success story (except Motech which has fallen behind).However the situation could change with established companies like TSMC,AUO  and numerous startup like DelSolar,Gintech making serious investments.

UMC to set up new firm for solar investments – Reuters

UMC’s board approved a plan to set up a wholly owned investment company, UMC New Business Investment Corp, which would be capitalized at T$1.5 billion ($46 million) and invest in solar and LED markets.”This will bring new momentum for UMC to further grow and enhance UMC’s future asset turnover and profitability,” UMC said in a statement after the Taipei stock market closed on Monday.”Technologies for renewable energy and energy saving will become the focus for future technology development; the growth of related industries is predictable,” UMC said.

TSMC is making a smarter entry into Solar Energy

TSMC has been a late entrant into the solar energy market but is making much smarter moves than its Taiwanese peers.It bought a 20% stake in Motech (Taiwan’s oldest and largest solar cell company) for $192 million.It bought this stake at an opportune time when the stock prices of solar companies are trading at trough valuations.Its $50 million stake buy in Khosla backed unlisted CIGS startup Stion is another smart investment.Stion is looking  to partner with major semi companies for manufacturing and TSMC which is the world’s largest foundry is an ideal partner.Stion which is claiming to be a much more finished product compared to other CIGs startups like Solyndra,Miasole and Nanosolar is trying to distinguish itself from the competition.It is trying to concentrate on the technology leaving the heavy capital expenditure on manufacturing to its partners.This strategy makes sense given the sharp fall in prices of mainstream Crystalline Silicon technology modules.However it remains to be seen if Stion can live up to its claims of delivering high efficiency modules at competitive costs.TSMC is smartly leveraging its own expertise in manufacturing with technology from its partners.Also it is diversifying its solar technology across both the mainstream crystalline and thin film technology with small equity stakes.This is quite intelligent as the jury is still out on whether thin film technology will take over from c-Si technology .

TSMC enters solar biz, invests in startup – EE Times

TSMC and Stion Corp., a San Jose-based manufacturer of thin-film solar photovoltaic modules, have 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.TSMC will provide a certain quantity of solar modules to Stion using the technology. TSMC and Stion will also work together to enhance the thin-film technology through joint development. No other details were given, however.

Now, TSMC will make a formal entry into solar with help from Stion. Formed in 2006, Stion is backed by Khosla Ventures, Lightspeed Venture Partners, Braemar Energy Ventures, and General Catalyst Partners.