TSMC’s statement was simple and clear, “TSMC believes that its solar business is no longer economically sustainable.” In other words, this is not a profitable industry.

If this statement had been issued by another company, it might not have been so worrisome. However, TSMC’s making this announcement is 100% percent stressful for observers. TSMC is an outstanding company, and they are able to excellently manage product quality, production yields, and output. However, despite this, it is impossible for them to overcome the inferior position of this overall environment.

Looking at the global market, CIGS solar batteries are mainly supplied to the United States and Germany, with the United States occupying nearly one-third of the market. The leading company is Nanosolar; furthermore, even they are struggling. However, Nanosolar is continuing to strengthen its funding and management so that it can yield stable profits. As for in Germany, the largest CIGS companies have already declared bankruptcy, been sold, or been merged.

Therefore, overall it is difficult for the global CIGS solar energy industry to find profitable niches. Or it could be said that the market is fundamentally too small to support so many companies and that their numbers should be reduced to the single or double digits like memory or LCD panel companies.

Taiwan’s Economic Daily News quoted a solar energy insider who commented that there are not enough CIGS products to compete with polysilicon solar products. They currently have an only 10% global market share, which is only enough to develop niche markets. In addition, CIGS solar products are overly costly, which is a further hindrance to their development.

However, this kind of statement must be further evaluated because if it is just a problem of technology and cost, it would be difficult for this alone to collapse the entire global market for this product. The more likely reason is that the market demand is fundamentally too small. This is the common ailment in the green energy industries, and people all too easily imagine a glorious future.

Therefore, after TSMC ceases operations in the solar energy industry, it will be tantamount to announcing the conclusion that the company’s investment in green energy industries was a failure. It was not long ago that they sold their LED lighting business as well.

(TR/Phil Sweeney)