Taiwan Semiconductor Manufacturing (TSMC) bought a 20 percent stake of solar cell maker Motech Industries for NT$6.2 billion (US$193 million), the companies said in a joint statement on Wednesday.
Motech, Taiwan's largest maker of solar cells, the key component of solar panels and solar modules, will become a key part of TSMC's move into green industries through the investment.
The two companies will work together on new business ventures, and TSMC will work with Motech to launch new products faster and evaluate other opportunities in the solar business, the companies said.
TSMC is the world's largest contract chip maker. The company as well as other chip makers work with the same polysilicon material used for solar cells and believe they have an edge in the industry due to materials research as well as expertise in manufacturing and management.
TSMC revealed a plan earlier this year to open a new business related to energy conservation, including the solar and LED industries. The company invested US$46 million earlier this year to open a LED (light-emitting diode) production line in central Taiwan, a move investment bank Credit Suisse called a first step into the LED lighting business.
At TSMC's second-quarter earnings conference, Chairman and CEO Morris Chang said the solar and LED will likely generate revenue as high as US$10 billion to $15 billion for TSMC by 2018.
Governments worldwide, including Germany and the U.S. state of California, have offered incentives for people to use solar panels due to rising oil prices.
The solar and other energy alternative industries are also being nurtured by governments such as the U.S. with stimulus money meant to battle the global recession.