CMC Magnetics to Launch Solar Unit, IPO in 2009
Date: 20-Jul-07
Country: CHINA
The unit, named Sunwell Solar Corp., would be wholly owned by CMC, and the firm expects to start production for solar cells in the second half of 2008 in the outskirts of Taipei, Y.Y. Hsiao, a spokesman, told Reuters.
CMC said in a statement that it planned to expand its businesses in hopes of entering the renewable-energy sector, as analysts and industry experts expect the solar market to grow 40 percent annually for the next five years in terms of volume.
Sunwell Solar will have a total paid-in capital of T$700 million (US$21.3 million) and an authorised capital of T$1.5 billion, Hsiao said.
"We have the technological advances and we want to follow the future trend," Hsiao said, adding that the firm plans to list on the Taiwan stock exchange in 2009.
However, analysts said it would be a challenge for CMC to enter the solar cell industry.
"You need high technological advances in this sector and it could be difficult for them, so they may need more time to develop this business," said Yuanta Core Pacific Securities analyst Ricky Liu.
Sunwell Solar would compete with well-established domestic rivals such as E-Ton and Motech Industries Inc. Taiwan's largest solar cell manufacturers.
It will also have to pit against global market leaders like Sharp Corp. and Germany's SolarWorld AG.
The solar market supplies only 1 percent of the world's energy needs and is worth an estimated US$7 billion annually. The industry may increase that proportion to 8 percent by 2030, according to the European Renewable Energy Council.
On Thursday, shares of CMC rose 3.26 percent, while E-Ton advanced 1.76 percent and Motech gained 1.23 percent, all outperforming the benchmark TAIEX index which closed 0.13 percent lower.
(US$1=T$32.8)