Rumors suggest TSMC is looking for an LED maker

Sept. 19, 2009
The largest silicon semiconductor foundry company may be seeking to buy one of the largest LED manufacturers, according to several articles.
Speculation last week surrounded Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), the world’s largest wafer foundry company, which may be looking to acquire an LED maker to support its move into "green energy", including solar power and LED lighting.

According to several articles doing the rounds, and originating in Taiwan, TSMC's proposed targets are Philips Lumileds or Toyoda Gosei. At present, these rumors amount to little more than unsubstantiated gossip. A spokesperson for Philips Lumileds told LEDs Magazine, "As a policy we don't comment on rumors and speculation."

An article on the Taiwan Economic News website claimed that TSMC had been in discussion with Philips Lumileds for three years, but the sides have not reached a consensus. However, said the article, the merger is more likely now because Philips intends to dispose of its unprofitable subsidiary, which has been "severely impacted by the global financial tsunami" since last year.

Furthermore, said the article, TSMC is an ideal owner to help improve Philips Lumileds’ operation efficiency and competitiveness with its cutting-edge R&D and production technologies. This may be true, but TSMC's speciality is in high-volume production of silicon-based semiconductors, a different proposition for LED manufacturing (the fit between TSMC and silicon-based solar cells appears to be much better).

Meanwhile, another article on the Digitimes website says that TSMC is looking to acquire either Philips Lumileds or Japan-based Toyoda Gosei, another major LED maker.

The article noted that if Lumileds and TSMC cooperated, TSMC's wafer-level packaging technologies and its substantial funding would reduce Lumileds' production costs, and increase its capacity and market share to enable its competition with US-based Cree for the leading position in the high-power LED market. However, sources from Lumileds indicated that Philips is unlikely to give up the company, said the article.

Although Toyoda Gosei has a low profile compared with some of its competitors, it is still a major LED maker and owns a number of key LED patents. The article says that Toyoda Gosei's parent company, Toyota, has no intention of expanding the chipmaker's capacity. It is also suggested in the article that Taiwan-based LED chipmaker Epistar is also interested in acquiring Toyoda Gosei, which outsources about 60% of its LED chip production to Epistar.