The world's biggest silicon wafer foundry Taiwan Semiconductor Manufacturing Co Inc (TSMC) says that its subsidiary TSMC Solar Ltd - which was founded in 2009 to make copper indium gallium diselenide (CIGS) photovoltaic modules - will cease manufacturing operations at the end of August as it believes that its solar business is no longer economically sustainable.
TSMC will continue to honor all product warranties offered to existing customers, and will also extend employment offers to all staff currently working at TSMC Solar upon the closure of its fab in Central Taiwan Science Park in Taichung.
TSMC Solar's late entry into the market and lack of economies of scale led to a substantial cost disadvantage, acknowledges TSMC's senior VP & chief financial officer Lora Ho. The firm has come to the conclusion that, despite what it claims is world-class solar energy conversion efficiency for CIGS technology, TSMC Solar will not be viable even with the most aggressive cost reduction plan.
"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," says Steve Tso, chairman of TSMC Solar and senior VP of TSMC. "Upon ceasing manufacturing operations at TSMC Solar, our most important concern will be the continued employment of our workers there."
TSMC estimates that charges related to closing the solar subsidiary's fab will impact third-quarter 2015 earnings per share by NT$0.07. Remaining solar panel inventory will be installed at TSMC buildings and facilities.
