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Over the past week or so, we've caught word of two different Asian tech heavyweights looking to make a splash in the solar realm.
Last Friday, Taiwan Semiconductor (NYSE: TSM ) announced a big management reshuffle, with the CEO moved to the helm of a new division seeking opportunities outside of the company's core semiconductor business. Guess which growth markets it's most likely to enter? Solar cells and LEDs.
TSMC, if you didn't know, is the world's largest dedicated semiconductor foundry, with more than $10 billion in sales last year. This firm really knows its way around a silicon wafer, so moving into solar cell manufacturing is not a big leap. Cypress Semiconductor (NYSE: CY ) set the precedent years ago with its acquisition of SunPower (Nasdaq: SPWRA ) (Nasdaq: SPWRB ) .
If TSMC chooses to build this business from scratch, I would expect the firm to become a formidable force over a five- to 10-year time frame. With a major acquisition, the date at which today's solar shops should start sweating could come much sooner.
Crystalline silicon solar players like Solarfun (Nasdaq: SOLF ) aren't the only ones facing an enormous new entrant. Thin-film companies awoke to this anxiety-inducing headline on Tuesday:
"LG Display to Nurture its Thin-Film Solar Cell Business as a Future Growth Driver"
This thin-film transistor liquid crystal display (TFT-LCD) leader generated more than $12 billion in revenue in 2008. The process of depositing a thin layer of silicon on glass is quite similar whether you're making an LCD display or a thin-film solar cell. That's exactly what allowed Applied Materials (Nasdaq: AMAT ) to sidle over to the solar business, and introduce its SunFab production line.
So, as with TSMC on the crystalline side, LG Display has both the financial heft and the tangential technology expertise to make a real splash in the solar sector. The company is looking to bring a 14% efficient solar cell to market around 2012, so solar incumbents have some time to prepare for this siege. Still, they might have a slightly harder time catching Zs.