During the financial crisis, TSMC suffered a big hit in its main IC foundry business and sought to diversify its risk by getting into the LED and solar panel markets.
The LED division was sold to Epistar in January 2015 for about NT$825 million (US$25.8 million) and now TSMC announces it's closing down its 100 percent subsidiary TSMC Solar because it believes the solar business is no longer viable. Production will end at the end of the month and the remaining solar panel inventory will be installed at TSMC buildings and facilities.
The foundry promises to honor all product warranties and said it will offer the employees of TSMC Solar new jobs at other facilities. TSMC remains committed to renewable energy but explains the exit due to its late entry into the market and lack of economies of scale, which made it impossible to turn a profit in the competitive solar market.
TSMC said that depite the world-class conversion efficiency of Tower Solar's CIGS (copper indium gallium selenide) cells the company's late entry into the market and a lack of economies of scale led to a substantial cost disadvantage. The remaining solar panel inventory will be installed at TSMC buildings and facilities.
"TSMC continues to believe that solar power is an important source of green energy and that solar module manufacturing remains a robust and growing industry, but despite six years of hard work we have not found a way to make a sustainable profit," said Steve Tso, chairman of TSMC Solar and senior vice president of TSMC, in a statement.