25 March 2010


TSMC breaks ground on LED fab

The world’s largest silicon wafer foundry Taiwan Semiconductor Manufacturing Co (TSMC) of Hsinchu, Taiwan has held a groundbreaking ceremony for its LED lighting R&D center and fab on Li-Hsin Road 4 of Hsinchu Science Park, marking a key step in the firm’s diversification into ‘green energy’.

TSMC is developing new businesses such as LED lighting and solar power to further strengthen long-term growth in revenue and profit, says chairman & CEO Dr Morris Chang. “The strategy, goals, and execution of our new businesses have developed very successfully in the past several months... I look forward to even more progress once construction is complete,” he adds.

“LED lighting is a promising industry, and we will make full use of TSMC’s technology leadership and manufacturing excellence in semiconductors to develop and integrate LED technology, process, and packaging and testing,” says Dr Rick Tsai, TSMC’s president of New Businesses. “We will enter the market next year by offering LED light sources and light engines to pursue the broad business opportunities of the LED lighting industry.”

The fab will be built in two phases. Investment in plant and equipment for the first phase is expected to reach NT$5.5bn (US$172m). Equipment move-in (initially with 8–12 MOCVD, according to Tsai) is scheduled for fourth-quarter 2010, with volume production in first-quarter 2011. The workforce is expected to rise to 130, said Tsai. TSMC says that it will make decisions on construction of the second phase depending on future business needs. Taiwan is already the world's biggest producer of LEDs.

TSMC is recruiting for its LED lighting business in areas including technology development, process integration, product mechanical engineering, packaging, testing, equipment engineering, facilities, and business development.

*According to a report by CNA English News, Chang said at the ground-breaking ceremony that he cannot agree with the allegation that the LED industry, like the solar energy industry, is a low-return sector, as many firms have competed to cash in on it. “TSMC is not interested in competing for petty profits with other rivals,” he said, adding that TSMC targets success through advanced technologies and high production capacity. “The LED operation will become one of the most important segments of the TSMC in 5–10 years,” Chang predicts.

Acquisition speculation

Reviving speculation that first surfaced last September in a Taiwan Economic News article, Digitimes reported last month that TSMC was reportedly looking to acquire LED makers Philips Lumileds or Toyoda Gosei for key LED patents.

Digitimes‘ sources noted that if Lumileds and TSMC were to cooperate, TSMC's wafer-level packaging technologies and its funding would reduce Lumileds' production costs, and increase its capacity. Philips already has close ties with TSMC, in which it has in the past held the majority stake. But Lumileds sources indicated that Philips is unlikely to agree to such an acquisition.

The report also said that many LED firms are interested in acquiring Toyoda Gosei, as it owns some key LED patents. However, sources at Toyota (its parent firm) said that it had no intention of expanding the chipmaker's capacity.

TSMC also has links with lighting firm and LED maker Bridgelux Inc of Sunnyvale, CA, USA, via VentureTech Alliance (majority owned by TSMC). In April 2008, VentureTech Alliance was a major investor in Bridgelux's $40m series D funding round.

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