April 21, 2008 – A $40M VC investment in a US-based LED epitaxy technology is generating rumors that TSMC is making a push into this market segment, points out a report in the Taiwan Economic News.

Earlier this month BridgeLux said it completed a $40M Series D round of financing, including $30M in private equity and ~$10M in bank credit, with funds to be used for “aggressive” product development, market expansion, and R&D. The company touts its capabilities in GaN epitaxy growth, device structures, and chip designs, targeting the high-power LED industry. Company founder/CTO Heng Liu introduced the industry’s first GaN MOCVD reactor, and most of its executives come from top two LED chipmakers Lumileds and Cree, the Taiwan paper notes.

A new investor participating in BridgeLux’s funding round was VentureTech Alliance, which the Taiwan paper notes is mostly owned by TSMC (its founder is former TSMC marketing SVP Ron Norris), and that connection “has sent shock waves through the global LED industry” — since it gives the world’s No.1 silicon foundry an inroad into the estimated ~$11.4B LED industry which boasts 20% CAGR through 2012, according to Strategies Unlimited.

To back up those fears, the Taiwan paper cited “insiders” claiming that TSMC has brought retired MOCVD tools back online, presumably being prepped for use in LED epitaxy wafer manufacturing. The company also has applied for a 1.2-hectare chunk of land in the Hsinchu Science Park, which could be reserved for a new LED business. Furthermore sidling up to BridgeLux would ease TSMC’s entrance into this market segment amid a tangle of patents by LED firms including Lumileds, Osram, and Nichia, the report notes.