Taiwan Semi Sets Aside $50M for Solar Business

| About: Taiwan Semiconductor (TSM)

By Ucilia Wang

The Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) has long discussed getting into the solar business. Now its board of directors has backed up the talks with money. On Tuesday, it set aside $50 million for "possible use in solar" investments.

The appropriation came a week after TSMC's founder Morris Chang said the company was looking at acquisitions as a way to enter the solar market. TSMC also could end up starting its own solar business.

Chang, by the way, founded the TSMC in 1987 and was re-appointed the CEO in June this year after the company had suffered losses for three quarters in a row.

The company is the world's largest contract chipmaker, producing semiconductors for company such as Intel (NASDAQ:INTC) and Texas Instruments (NYSE:TXN).

Folks in the chip business have viewed solar as a cousin industry because the manufacturing of chips and solar cells are similar in many ways. The solar market is growing fast while the chip industry is not.

National Semiconductor (NYSE:NSM) and Applied Materials (NASDAQ:AMAT), two giants in the chip industry, already have branched out into solar with commercial products. Jabil Circuit (NYSE:JBL), a contract electronics manufacturer, has lined up a contract to make solar panels for SunPower (SPWRA).

TSMC should have lots of options in shopping for solar investments. It's headquartered in Asia, which already dominates as a manufacturing hub. The company could take advantage of its proximity to China, which is creating incentives to turn itself into a large solar energy market and help its domestic producers at the same time.