* TSMC board OKs $50 mln for potential solar investments
* Stock falls before announcement, lagging big board (Adds details and share prices)
TAIPEI, Aug 11 (Reuters) - Top contract chip maker TSMC (2330.TW) said on Tuesday it would allocate $50 million for possible investments in solar energy-related areas, as part of its efforts to diversify into the solar market.
TSMC (TSM.N) announced the news after its board meeting, where the company also approved capital appropriation of $1.1 billion to boost chip capacity using advanced 45-nanometre process technology and install 32-nanometre process capacity.
The company had said about two months ago it planned to venture into LEDs (light-emitting diodes) and solar energy as it sought diversification and long-term growth drivers beyond chip foundries.
TSMC did not give other details on its potential investments in the solar market.
Before the announcement, TSMC's Taipei-listed shares fell 1.2 percent, while the main TAIEX .TWII rose 0.4 percent.
TSMC said its new non-foundry business would garner revenue of another $2 billion by 2018, and it did not rule out spinning off its new businesses in the future. [ID:nTP279120]
A local newspaper said earlier on Tuesday that TSMC was likely to buy a stake that Powerchip 5346.TWO owns in Neo Solar Power (3576.TW), while the paper said TSMC and Neo Solar declined to comment.
Shares of Powerchip, the island’s biggest DRAM chip maker, surged 6.9 percent to their daily limit on Tuesday, but those of Neo Solar were unchanged. (US$1=T$32.8) (Reporting by Baker Li, Editing by Jacqueline Wong)