March 26, 2010 – TSMC has officially broken ground for its new LED lighting R&D center and fab in Taiwan’s Hsinchu Science Park, part of its multibillion-dollar initiative to establish a foothold in higher-growth markets outside of core IC fabrication.

"LED lighting is a promising industry, and we will make full use of TSMC’s technology leadership and manufacturing excellence in semiconductors to develop and integrate LED technology, process, and packaging and testing," said Rick Tsai, TSMC’s president of new businesses. The company plans to enter the market in 2011 with LED light sources and "light engines," he added.

The new facility will be built in two phases, TSMC says: Phase 1, with a NT$5.5B/US ~$173M investment, projects equipment move-in for 4Q10 (including 8-12 MOCVD chambers, according to the Taiwan Economic News) and anticipating a production ramp in 1Q11.

A second phase will be decided depending on the market and "future business needs." The company says it is "actively recruiting" for the business, in all areas: technology development, process integration, product mechanical engineering, packaging and testing, equipment engineering, facilities, and business development. TSMC already has been adding packaging/testing capabilities through subsidiaries Xintec and VisEra Technologies to facilitate integrated production, adds the Taiwan Economic News.

Last summer TSMC brought back former leader Morris Chang to retake the helm (from Tsai) and expand its leading-edge semiconductor technology out into the world, particularly into LEDs and solar energy, creating up to $2B in nonfoundry business by 2018.

Rival Taiwanese foundry UMC also has eyes for the LED market; it plans to set aside ~20% of its 150mm fab for LED epitaxy wafers, and add work for LED packaging/assembly at a site in China.