TSMC's Chang Vows to Make LED Production a Crucial Biz

Taipei, March 30, 2010 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman and Chief Executive Officer Morris Chang recently emphasized LED and solar-gear productions would become two crucial revenue earners for TSMC after five to 10 years.

He made the statement after presiding over a ground-breaking ceremony for TSMC's first LED factory last week in response to speculations that LED and solar industries are already low-margin business witnessing numerous entrants.

Chang countered the speculations by citing TSMC's success in maintaining high profit in the foundry business, which was thought to be less profitable when the company entered around 20 years ago. "Should we get involved in a meager-margin business? Absolutely not!" he stressed.

The top executive of No.1 silicon foundry said he believed LED and solar energy remain high-profit and high-growth industries, adding that his company would set up brand name operation instead of contract manufacturing in the LED market, a clear contrast to its business model for chip making.

Chang noted that the company's strategy for LED business will place R&D ahead of factory in deployment priority.

TSMC's first LED factory is scheduled to enter into volume production after the first-phase construction, which is estimated to cost NT$5.5 billion (US$171 million at US$1:NT$32) in investment, is completed in the first quarter of 2011.

According to Rick Tsai, president of TSMC's New Business in charge of the company's LED and solar energy business, the factory would focus on LED light source and LED "light engine", or known as light module by lighting manufacturers.

Tsai said LED and silicon-chip productions are closely related except for business model and TSMC is good at both productions.