TSMC Buys Into LED Epitaxy Wafer Business

Taipei, April 21, 2008 (CENS)

Venture capital firm VentureTech Alliance, mostly owned by Taiwan Semiconductor Manufacturing Co. (TSMC), recently put around US$40 million into LED epitaxy-wafer maker BridgeLux of the United States for a seat at the company`s director board.

Industry watchers pointed out that the investment has sent shock waves through the global LED industry, racking nerves of establishments in this segment. They said that the investment will lead the No.1 silicon foundry into the LED industry, whose revenue is estimated at US$11.4 billion worldwide a year, at a time when silicon foundry industry is growingly crowded.

TSMC executives confirmed the reports on this investment although they stressed it is VTA`s decision based on its profession. However, insiders pointed out that TSMC had brought back retired metal organic chemical vapor deposition (MOCVD) machines into use in preparation for LED epitaxy-wafer manufacturing. In the meantime, TSMC has applied for a 1.2-hectare land with the administration of the Hsinch Science Park, incurring speculations that the company will open its LED business on this land.

VTA was founded by Ron Norris, who is a former TSMC senior vice president for worldwide marketing and sales.

BridgeLux is a leading LED maker in the United States, boasting some unique technologies for the manufacturing. The company`s founder and chief technology officer, Heng Liu, introduced the industry`s first GaN MOVCD reactor. BridgeLux Chief Executive Officer Mark Swoboda is a former executive vice president of Philips Lumleds. The company`s management team is mainly composed of talents from Lumleds and Cree, the world`s top two LED chipmakers.

Industry watchers pointed out that it is natural for TSMC to partner with BridgeLux from the two companies` respective profession, with TSMC specializing in foundry while BridgeLux good at design. LED heavyweights including Lumileds, Osram and Nichia have made the entry into this industry harder with a sea of patents they have won, pushing TSMC to ally with BrigeLux to escape the patent net.

Market research organization Strategies Unlimited estimates global LED industry to post an annual compound growth rate of 20% over the next five years and high-power LED segment alone to likely grow approximately 20% throughout this year.

(by Quincy Liang)