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Taiwanese Giants Rumble Into LEDs

The world's largest dedicated semiconductor foundry may join one of the world's top three thin-film transistor LCD panel makers in moving into compound semiconductors, but apparently not in conjunction with Bridgelux.

AU Optronics and Taiwan Semiconductor Manufacturing Company (TSMC), who both make billions of dollars in revenues annually, are looking at breaking into the LED business for future growth.

In a statement to the Taiwan Stock Exchange on April 25, LCD maker AU Optronics (AUO) said it will invest NT$1.5 billion ($49.3 million) in a new LED manufacturing subsidiary.

Representatives from AUO told that the subsidiary, called Lextar Electronics, will manufacture products from the LED chip level through to LCD backlighting units.

Similarly TSMC, the silicon chip maker that claims to earn half of all dedicated foundry revenues globally, is looking at LEDs to supplement its core business.

Specifically the company s “special projects" organization, headed by Dr. Kenneth Kin, is looking at this as an option within its ongoing revenue growth plans.

“TSMC is evaluating many new technologies and new businesses, and LED is one of the areas that we are looking at," a spokesperson for the company said.

However, TSMC denies recent media reports that it has a direct relationship with LED maker Bridgelux. TSMC has invested in a venture capital company called VentureTech Alliance, which recently led a $30 million fundraising round for Bridgelux (see related story), but the Taiwanese foundry says that this is where the relationship ends.

Bridgelux itself repeated the same assertion, as did Bob Walker, who was CEO of Bridgelux until July 2007. Prior to joining Bridgelux, Walker was a venture capitalist focusing largely on LED technology investments in Taiwan. As such, he is not surprised that TSMC is thinking about developing LED manufacturing.

“I m certain that they're always thinking [about] how they can grow beyond the silicon manufacturing they have today," Walker said. “I think they'd be foolish not to think about LEDs."

However, Walker pointed out that the link with Bridgelux is tenuous, as it is likely that VentureTech only contributed a small portion of Bridgelux's funds.

“Bridgelux s foundry partner historically has been Epistar," he said, “so I don't think there s any relationship with TSMC."

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