September 5, 2006 – Taiwanese power supply maker Powercom Co. is contracting mainland foundry Semiconductor Manufacturing International Corp. (SMIC) to manufacture solar cells, with operation scheduled to begin in November, according to the Taiwan Economic News.

Powercom aims to be the first Taiwan company to start volume production of solar cells, spending between $31-$62 million for three lines by the end of next year, increasing annual capacity fivefold to 100MW. Analyst expect the extra solar cell business to add $93 million/year in revenues (based on $3M per 1MW of cells), and generate $18 million in annual profits.

Powercom chairman F.H. Chang noted that the collaboration sprang from his company’s oversupply of polysilicon from European and US suppliers, and a need to minimize inventory backlog.

SMIC has been producing solar cells since this spring for customers in Germany and Japan, with output capacity of about 2.5MW/year.