TSMC to Increase Its VisEra Investment

EETimes: TSMC's board also approved an increase of the investment not exceeding $27 million in VisEra Technologies (Hsinchu), a provider of CMOS image sensor foundry services.

In October 2003, TSMC and CMOS image sensor maker OmniVision Inc. (Sunnyvale, Calif.) entered into an agreement to form a joint venture called VisEra Technologies in Taiwan. VisEra's mission is to provide manufacturing services and automated final testing in the CMOS image sensor arena.

TSMC and OmniVision also entered into separate non-exclusive license agreements with VisEra pursuant to which each party licenses certain intellectual property to VisEra.

In August 2005, TSMC and OmniVision amended the deal. Under the plan, the parties agreed to raise the total capital committed to the joint venture from $50 million to $68 million.

"The $18.0 million increase was designated principally for the acquisition from existing shareholders of approximately 29.6 percent of the issued share capital of XinTec Inc., or XinTec, a Taiwan-based provider of chip-scale packaging services of which [OmniVision] directly own approximately 7.8 percent," according to a filing by the U.S. supplier of CMOS image sensors.

In fiscal 2006, VisEra invested an additional $0.5 million in XinTec as their portion of an additional capital injection to enable XinTec to expand its production capacity.

In total, TSMC and OmniVision increased their stake in VisEra from 25 percent to 43 percent. In the quarter ended January 2006, the two companies increased its interest in VisEra from 43 percent to 46 percent through purchases of unissued shares.

In January 2006, VisEra purchased from TSMC the equipment used for applying color filers and micro-lenses to wafers. VisEra is now providing the related processing services that OmniVision previously purchased from TSMC.

"We outsource our wafer manufacturing for CameraChip image sensors to Taiwan Semiconductor Manufacturing Company, or TSMC, and Powerchip Semiconductor Corp., or PSC," according to OmniVision in a recent filing. "In addition, TSMC and Semiconductor Manufacturing International Corporation, or SMIC, fabricate our companion DSP chips."