TAIPEI: Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading custom chipmaker, announced Wednesday that it will invest NT$6.2 billion ($192.55 million) to acquire a 20 percent stake in Motech Industries.

The deal will give TSMC a foothold in the solar energy industry, while Motech, Taiwan's oldest solar-cell maker, will have a wealthy stock owner to fall back on. It will prove most effective if the partnership brings new prospects to the whole industry and gives it a shot in the arm.

The investment deal will take effect in January next year, TSMC said Wednesday, adding that it will hold on to its stake in Motech for a minimum of three years.

A TSMC spokesman said that Motech will call a meeting of its board of directors next January to approve the deal and TSMC is expected to gain two seats on the new board.

TSMC began to evaluate the potential of the solar energy industry long before the industry rebounded from the global financial crisis.

TSMC's chief executive officer Rick Tsai, who was assigned in June as head of its New Business Department, was eyeing the acquisition of a solar energy firm as a means of venturing into the industry.

At one point, TSMC reportedly had set its sights on New Solar Power Corp, with which it is closely associated.

Before the global financial crisis broke, entry into the solar energy industry was relatively easy because it didn't cost much, and speculation was rife about take-overs and acquisitions.

Now that the crisis is over and the price of raw materials is dropping, the cost of solar energy could fall to the level of grid electricity.

TSMC is eager to break into new industries, while Motech is keen to find investors with abundant cash. Therefore the deal is advantageous to both sides.

But neither side knows what the next step should be, although they both agree that the prospects are bright for the burgeoning industry.

The public hopes that the cooperation between the two companies will bring new development opportunities for the emerging alternative energy industry, according to analysts.

China Daily/CNA

(HK Edition 12/11/2009 page2)