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JA Solar, Roth & Rau join SVTC Solar at new photovoltaic development center
27 June 2008 | By Tom Cheyney | Chip Shots
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This week's news finds the nascent PV technology development center in cahoots with two important players as it moves closer to opening its doors: joining SVTC Solar will be leading turnkey-line toolmaker Roth & Rau and one of the fastest-growing solar-cell manufacturers, JA Solar. Not only will the alliances provide silicon wafer cell pilot-line manufacturing capability to the newly named Silicon Valley Photovoltaic Development Center (SVTC's SVPVDC? That's a mouthful of alphabet soup) and a top 10-level customer and research partner, but it gives the new site instant global credibility and reach with its key German and Chinese collaborators.
SVTC Solar's Laetz likes how things are developing.
"The vision of this facility," Laetz said during a phone briefing, "is that we will be creating an internationally recognized facility in the solar industry where companies can do their development work. We are going to take all those best practices [learned at SVTC] and put them in the solar facility and offer these development services to the global market."
"A key to our entrance into solar was the realization from talking to many of the solar [cell and module] manufacturers that there were broader resources that needed to be supplied, support resources for development, and we realized that we needed to have a facility that was more of a partnership among key service providers," he continued. "We sought out and are teaming with equipment manufacturers, with Roth & Rau being our premiere partner in that area. We're also looking to form key partnerships with other companies and are having conversations right now to bring a broad swath of development services into this facility to service solar manufacturers."
Laetz said that the recently leased facility is "undergoing tenant improvements"--including fitting out the cleanroom areas--with the "equipment expected to be arriving in the second half of 2008." For the time being, the PV-related work will continue to be done in the company's main San Jose fab, with some efforts also taking place in its ATDF facility in Austin. The company is hiring "the first few team positions" and "anticipates having between 10 and 15 [dedicated] employees by the end of the year, and about 60 when fully ramped."
Asked how much of its business SVTC expects the new PV unit to account for, Scott Marquardt (the company's VP of sales, marketing, and strategic biz dev) said, "we see solar coming to 20 to 25%," although he offered the caveat that the cost of processing solar is about two orders of magnitude less than the costs associated with the semiconductor side of the business.
He also believes that most "customers will come and contract for some percentage of available line and equipment time. A big difference with the semiconductor business is that with the process steps for making a solar cell, there's a fair amount of commonality....That does provide some constraints, but I still think we're going to see alot of variations as people look to reduce cost and increase efficiencies."
The development house is also "looking for [reliability and testing] capability to be offered, but probably not by SVTC Solar, but through an independent service provider located within the facility, most likely a third party. We're setting aside the space [to provide these services]."
Laetz said Roth & Rau's 5-MW turnkey pilot line will be "the heart of the silicon wafer services in the facility. It will allow us to have baseline manufacturing processes, which is very important for our customers, to be able and come in and make their modifications and improvements to their processes and process steps, and have a baseline equipment set to try out and measure those improvements on."
The 5-MW line represents "one complete set of Roth & Rau equipment," according to the center's program manager. "If you were to actually calculate the throughput, in manufacturing with their uptimes it would actually be closer to a 10-MW line. But we're calling it a 5 MW pilot line, because in development you don't run as many wafers."
The 18-year-old German PECVD, plasma etch, and ion beam tool company has been experiencing tremendous growth and success the past few years, seeing its revenues increase nearly 79%, its consolidated net income jump 124%, and its order backlog more than double to over 222 million Euro in the first quarter of this year.
Within the past few months, the company was added to the Frankfurt Stock Exchange's TecDAX index, closed a deal to buy systems and software supplier AIS Automation Dresden, and joined forces with the University of Neuchatel's Institute of Microtechnology in Switzerland to conduct research on highly efficient silicon solar cells. Roth & Rau is also benefiting from the opening of a new, expanded manufacturing site in eastern Germany in late 2007 as well as the SLS joint venture signed with automation systems supplier USK earlier this year.
Company CEO and founder Dietmar Roth said that although it has a "very diversified customer base in Europe and Asia, and hopefully more in the United States in the future (although they count BP Solar and SunPower among their clients). One of our reasons that we did this deal with SVTC is for us to [meet the] challenge to come into the US market to demonstrate state-of-the-art technology in PV. We believe that this is a very nice business model that SVTC has and the experience that they have, and that was the second reason we agreed to invest here.
"What we will have at the end of the year will be a fully equipped solar cell manufacturing line, starting with solar wafer and coming out with finished cell. That technology is the latest state of the art that we deliver. We believe that we can bring a lot of new ideas and new innovations which are necessary to meet the targets for the future," including that all-important two-pronged goal--reducing cost and increasing cell efficiencies.
As for monocrystalline silicon cell insurgents JA Solar, Laetz introduced the company as "the first customer of the new facility," explaining the plan for the Chinese-based manufacturer to "loan some development engineers" and utilize the fab. JA Solar president/COO Kang Sun reviewed the company's steep upward trajectory during the phone briefing, claiming it has been the "highest growth solar company in the world, in terms of revenue," jumping from "$140, $150 million a couple of years ago, to $380 million last year, and this year could be $1.2 billion."
In terms of solar cells shipped, the exec with the made-to-order last name said that JA Solar ranked number 21 in 2006, number 10 in 2007, and "this year, if we ship 340 MW, we'll be number 5, and if we ship 385 MW, we'll be number 4." By the end of next year, Kang said the company will add enough capacity at its two newest facilities to hit the 1-GW nameplate mark.
"Our goal, like Roth & Rau, is to be cost leader in the industry," he continued. "To do that, we need the technology. Everything comes down to the technology. We have cost drivers, we have profit drivers. Currently we have our own research center located in China, but we don't see ourselves as just a Chinese company--we see ourselves as a global company. So we leverage global resources. For this reason, we are very pleased to team with SVTC."
He said JA plans to send several full-time people to the SVPVDC, specialists in the areas of materials, equipment, device design, and process. "Conversion efficiency is the key. Today, JA Solar holds the world record, in terms of solar-cell manufacturing cost. Our manufacturing cost is 28 cents per watt, while the industry overall cost is about 35 or 36 cents per watt. SunPower is 85 cents per watt," although he admitted that was not a fair comparison, because the other company uses a different technology, and "Q-Cells is at about 55 cents per watt."
"However, bringing down costs is just one approach to be the cost leader, another approach is creating increased profitiability. The high-efficiency cell certainly gives us alot of leverage to be a low-cost leader. Today, in our manufacturing environment, a 1% increase in efficiency is equivalent to a 5% gross margin gain, so it's very substantial to us."
As for the company's current efficiencies, "the number we give to investors is an average of 16.5. In reality in our fabs, it's between 16.8 and 17. Our goal is at the end of the year our average will be 17%. Our goal is to increase efficiency 1% per year in the next 2 years."
Since JA Solar's current technology has what he calls "certain limitations" (about 19% efficiency potential), Sun knows that the company has to "work with our equipment vendors, like Dr. Roth (a major supplier to JA), to have more dramatic changes. Our research approach in the US (at SVTC Solar) will be quite different. We are not lookng for incremental increases, we are looking for more substantial movement in the US research team."
At the end of the briefing, it was incumbent on this reporter to ask one of the obvious questions: Does SVTC Solar plan to install a PV panel array to help power its new development center?
"That is something we absolutely would like to do," said Marquardt. "There's two open fields adjacent to the facility. They're owned by a separate landlord, and we're just getting in touch with him. There's also the possibility of putting them on the roof."
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