Taiwan Semiconductor Agrees to Acquire Panels From Germany's Centrosolar

Centrosolar Group AG, a rooftop solar-system maker, will build panels for Taiwan Semiconductor Manufacturing Co. to show Germany can compete with production in lower-cost countries, the company said. The shares gained.

Centrosolar initially will supply 100 megawatts a year of module capacity using component cells supplied by TSMC, said Alexander Kirsch, the Munich-based company’s chief executive officer. Terms of the deal are confidential, he said on a conference call today.

German solar product makers including Q-Cells SE have opened factories in Asia to reduce labor and operating expenses and to try match prices offered by Chinese competitors. TSMC, the world’s largest custom manufacturer of chips, may benefit from moving production closer to prospective clients as it turns to renewable energy to boost growth.

“Modules can be made competitively in Germany and there is demand,” Kirsch said today on a call with reporters. “It takes six weeks for shipments from Asia to reach Europe. That costs money but in a changing market it’s also a disadvantage.”

The shares jumped 7.3 percent to 5.14 euros in Frankfurt trading as of 9:54 a.m. local time. That’s the biggest intraday gain since Aug. 4.

Centrosolar will be TSMC’s sole manufacturer of crystalline solar modules in Europe under the five-year agreement, the Munich-based company said in a statement. First deliveries are scheduled in the third quarter, the company said.

The German company will build an additional production hall and warehouse in the German town of Wismar, providing the space needed to boost capacity from 200 megawatts to as much as 500 megawatts, according to the statement.

Centrosolar will spend about 20 million euros ($25.9 million) on a first 150-megawatt expansion, Kirsch said.

The agreement with TSMC is a “strategic alliance” and Centrosolar hasn’t discussed being acquired by TSMC, Kirsch said. “This was always a technical cooperation in specifically defined areas, and it’s staying at that.”

TSMC, based in Hsinchu, Taiwan, said in September that it will spend $258 million in the first phase of a plan to make solar modules. The company will begin volume production at a plant in Taichung, central Taiwan, in 2012, TSMC said.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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