United Microelectronics Corp. (UMC), a major Taiwan contract chip-maker, yesterday announced it will suspend investment to the photovoltaic (PV) cells industry, which has been sluggish lately.

“Due to a slowdown in the PV business, we have decided to take a conservative approach to respond,” said Liu Chi-tung, chief finance operator of UMC. “That's why we've decided to suspend investment in the PV cells industry, until the market shows signs of a turnaround.”

UMC meanwhile has conducted evaluations on previous investments in the PV sector. Some of the reinvested businesses have already closed, Liu said.

As for LED, Liu said UMC's partner in the LED industry is Epistar, which spearheads all investment-related activities. “LED is no longer a new business that UMC invests in,” Liu said.

UMC's move came after Morris Chang, chairman and CEO of larger rival Taiwan Semiconductor Manufacturing Co. (TSMC), said the company may get rid of its holdings in photovoltaic firm Motech Industries, which has posted huge losses.

TSMC in December 2009 purchased a 20-percent stake, or 73.52 million shares, of Motech with NT$6.2 billion, or NT$82.7 a share.

Yet the huge losses posted by Motech has produced a negative impact on TSMC, whose loss for investing in Motech has reached about NT$4 billion.

“Our outlook for the photovoltaic industry is still positive, yet the objectives of a strategic alliance with Motech have already been achieved,” Chang said.