Solar Cell Manufacturers Cluster in Yilan

The China Economic News (CENS) reports many of Taiwan's solar cell manufacturers and their upstream and downstream suppliers are clustering together in Letzer Industrial Park on the east side of Taiwan. One of the reasons for the popularity of the park is the opening of the new Taipei-Yilan highway which has significantly cut travelling time to and from the east coast.

CENS writes:

With Taiwanese companies of solar cells clustering in Letzer Industrial Park in Taiwan`s northeastern county of Yilan, a full, integrated supply chain of solar cells is gradually forming in the park.

At the moment, a number of Taiwanese upstream and downstream suppliers of solar cells have set up their plants in Letzer Industrial Park, occupying nearly 40 hectares of land there. Such a clustering effect makes the park Taiwan`s most important manufacturing base of solar cells.

Moreover, Sun Well Solar Corporation, a subsidiary of Taiwan`s CMC Magnetics Corp., has recently been approved by the park administration to set up a 21-hectare plant to turn out thin film solar cells in the park. Sun Well will achieve production capacity of 1 gigawatt in the plant in the near future, and hence plans to further apply for more hinterlands for capacity expansion.

After Taiwan`s presidential election this year, Lezter Industrial Park has become the hottest industrial park for solar cell suppliers on the island, partly because completion of No. 5 National Freeway, or called Taipei-Yilan Freeway, makes the transport between the two places more convenient, and partly because the park administration has planned to build a full supply chain of solar cells in the park.

Taiwan`s Industrial Development Bureau under MOEA has recently released additional land of about 20 hectares in Lezter Industrial Park for 26 enterprises to rent. However, this is not sufficient enough to satisfy them, as a total of 53 hectares of land is needed, based on their applications.

The development and growth of the Letzer industrial park is not unlike that of the Hsin Chu Science park where more than 20-years ago semiconductor companies started to cluster to facilitate easier cooperation between them. The cluster effect is a well known phenomenon and Silicon Valley in the US is a typical example (see Wikipedia page). Some have argued the cluster effect made the Hsinchu Science Park as successful. Companies operating in the Letzer industrial park may also benefit from the cluster effect. It is easier for different companies to talk to their suppliers and buyers and work cooperatively together to solve both upstream and downstream problems. It also reduces the neccessity for companies to integrate vertically since participants in higher or lower parts of the value chain are close at hand.

Interestingly the Souther Taiwan Science Park (STSP) in Tainan county has also benefitted from a clustering of optoelectronics companies and biotech companies.

One thing I am curious about though is where does the name Letzer come from? It is not a very Chinese name.

China Economic News: Full Supply Chain of Taiwan`s Solar Cell Sector Forms in Letzer Industrial Park