August 25, 2015
By ALLISON GATLIN
INVESTOR’S BUSINESS DAILY
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Apple (NASDAQ: AAPL) chipmaker Taiwan Semiconductor Manufacturing (NYSE: TSM) announced Tuesday it would shutter its costly solar operations by month’s end.
The move will likely reduce TSM’s EPS by 7 cents in Q3, Steve Tsu, chairman of TSM Solar, said in a company press release.
Tsu said the company couldn’t turn a profit with its solar manufacturing and that even the most aggressive cost-reduction plan wouldn’t make the solar subsidiary viable.
“TSMC continues to believe that solar power is an important source of green energy and that solar module manufacturing remains a robust and growing industry,” Tsu said in the release. “But despite six years of hard work, we have not found a way to make a sustainable profit.”
The company will honor all existing product warranties and plans to offer alternative jobs to employees working at its Taichung solar factory, Tsu said.
For Q3, seven analysts polled by Thomson Reuters on average expect Taiwan Semiconductor Manufacturing to earn 44 cents per American depositary receipt. That would be down from 50 cents in Q2 and 48 cents in Q3 2014.
Taiwan Semiconductor Manufacturing stock was down more than 8% at one point in Monday’s crash to an 18-month low, but shares ended the day down just a fraction. In morning trading in the stock market today, Taiwan Semi was up 4.5%.
The company manufactures chips for Apple.
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