Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, yesterday said its board has approved a plan to sell its unprofitable LED subsidiary to Epistar Corp (晶電) for NT$825 million (US$25.85 million) in cash and exit from the highly competitive LED market.
TSMC will book NT$740 million in losses from selling the LED business, according to a company statement filed with the Taiwan Stock Exchange.
After the transaction is completed, Epistar, the nation’s top LED manufacturer, will hold a 565 million share (94 percent) stake in TSMC Solid State Lighting Ltd (TSMC SSL, 台積固態照明), according to a joint statement. Shares of TSMC SSL are priced at NT$1.46.
The transaction value is much lower than the NT$1.26 billion to NT$1.89 billion share swap Chinese-language Wealth Magazine reported on Dec. 2.
TSMC SSL “has struggled to reach profitability due to oversupply following the massive expansion of the LED industry in the past several years,” TSMC said in the statement. “As a late entrant, TSMC SSL has also faced difficulties overcoming patent obstacles and establishing sales channels.”
TSMC SSL has lost NT$3.65 billion over the past three years since its establishment in 2011, according to TSMC’s annual reports.
Related rules stipulate that the LED company requires an injection of new capital to improve its financial structure, after accumulated losses exceeded 50 percent of the LED company’s share capital of NT$6.01 billion.
TSMC SSL chairman Steven Tso (左大川) said the deal would create a “win-win scenario.”
Epistar has a better patent portfolio from cross-licensing with the world’s major LED companies, which include Philips and Toyoda Gosei, and has deployed a wide network of sales channels across the globe, the statement said.
“TSMC SSL’s capacity might be far less than Epistar, but by working with TSMC we can be introduced to different thinking, talent and systems from across industries to spark new ideas and improve Epistar’s future operations,” Epistar chairman Lee Biing-jye (李秉傑) said in the statement.
The acquisition of TSMC SSL is Epistar’s latest effort to boost its capacity and talent, in an attempt to capture the fast-growing LED lighting market over next three years, following a merger with rival Formosa Epitaxy Inc (璨圓光電) about a month ago, the statement said.
“The merger will significantly help Epistar shrink its learning curve in expanding to make large-size [LED] wafers and will also help the company migrate toward [advanced] wafer-level chip packaging technology,” Joanne Wu (吳盈潔), an analyst with market research house LEDinside, said yesterday.
The deal will also help boost Epistar’s LED chip capacity, Wu said.
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
CARBON REDUCTION: ‘As a global leader in semiconductor manufacturing, we recognize our mission in environmental protection,’ TSMC executive Y.P. Chyn said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday launched its first zero-waste center in Taichung to repurpose major manufacturing waste, which translates into savings of NT$1.5 billion (US$46 million) in environmental costs a year. The environmental cost savings include a carbon reduction benefit of 40,000 tonnes, equivalent to the carbon offset of over 110 Daan Forest Parks, the chipmaker said. The Taichung Zero Waste Manufacturing Center is part of the chipmaker’s greater efforts to reach its net zero emissions goal in 2050, aligning with the UN’s 12th Sustainable Development Goal. The center could reduce TSMC’s outsourced waste processing
RSS