Taipei, July 4 -- Taiwan Semiconductor Manufacturing Co. (TSMC) has decided to phase out its GaN (Gallium nitride) semiconductor business in two years, a move analysts said was due to competition from China, which has eroded the product's profit margin, Focus Taiwan reported.

In a statement Thursday, TSMC, the world's largest contract chipmaker, said the decision was made after a comprehensive evaluation that took into account its long-term development strategies and market conditions, the news report said.

TSMC's announcement came after US-based Navitas Semiconductor said earlier this week it has set up a strategic partnership with Powerchip Semiconductor Manufacturing Corp. (PSMC) and will shift its GaN orders from TSMC to PSMC over t...