Just 2 weeks ago, I wrote that TSMC is allocating $50 million for solar investments. Now, Reuters reported on 24 Aug 2009 that UMC, the world’s no. 2 contract chip maker is following sector leader and rival TSMC to diversify into solar-related markets.
UMC’s board approved a plan to establish 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. UMC will also set up a new business development center and Chen Wen-yang, a senior UMC vice president will be in charge of its operation.
The firm says that Chen will leverage his experience in the semiconductor industry to conduct evaluations on various investments. He will also be responsible for the integration, management and utilization of human resources, technology and capital. The new center aims to focus on industry sectors with high growth and profit potential. UMC New Business Investment Corp will then target timely strategic investment on the basis of the center’s evaluations.
Comment: TSMC and UMC which has combined 60% market share (TSMC – 45%, UMC – 15%) in the semiconductor chip industry is entering the solar industry which is currently in the state of massive oversupply. Is it too late to enter the industry where China is leading the solar production? Possibly they will use the same model of making chips mostly for those who do not own factories (we call them fabless companies) to the solar industry where the companies currently have their own factories/fabs. Only some companies like BP Solar and SunPower have recently outsource their solar panel production to contract manufacturers. Taiwanese companies which are well-known for contract manufacturing for items such as chips, computers, mobile phones and other electrical items will definitely eye for a piece of pie in the solar industry. Motech and Gintech Energy are currently the only Taiwanese companies in the top 10 PV companies in the world.