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Solar shakeout: Oerlikon Solar to be sold to Tokyo Electron


Updated: Oerlikon Group’s loss-making Oerlikon Solar, the originator of the turnkey thin-film business model with a-Si and tandem-junction thin-film technology, is being sold to Japan’s leading semiconductor equipment supplier, Tokyo Electron (TEL). Oerlikon is focusing on its other engineering divisions as part of revenue growth avenues. The deal is expected to be concluded over the next few months with more details to be provided on Monday when quarterly results are reported. Financial details were not disclosed. TEL had been a sales representative in Asia for the thin-film technology.

Oerlikon Solar’s major competitor in the a-Si thin-film market had been Applied Materials; however, the major equipment supplier pulled out of the turnkey market several years ago. As polysilicon prices declined and capacity expansions passed the gigawatt scale, c-Si technologies became highly competitive again and the market dominance of First Solar using CdTe thin-film technology forced many potential new entrants to defer market entry.

Moreover, some existing turnkey players went bankrupt, while others curtailed further capacity expansions, significantly limiting revenue streams for suppliers.  

"This divestment is an important part of our strategy to streamline and balance the Group portfolio,” commented Dr Michael Buscher, CEO of Oerlikon Group. “TEL is an ideal strategic buyer for our solar business. Its main operations are close to the predominantly Asian customer base and having had a partnership with them for three years, they know our Solar Segment well. The sale will give us the opportunity to focus on our high performing businesses, where we have critical mass, strong market positions and the potential to grow even further with increased profitability. We are convinced that this step is also the best solution for our employees as TEL is a strategic buyer aiming to develop a core solar business," added Buscher.

“TEL will take this opportunity to combine Oerlikon Solar's expertise and TEL's own semiconductor production equipment technologies that we have developed over many years to further improve performance,” remarked Hiroshi Takenaka, president & CEO of TEL. “The establishment of operations in the photovoltaic power generation business, that is anticipated to demonstrate continued development in the future, is one part of TEL's growth strategies, and we are also confident that we can contribute to the mitigation of global environmental issues in our role as a production equipment manufacturer."

Oerlikon Solar is said to employ 675 people in eight locations worldwide and has 15 customers in production in seven countries. Total revenue in 2010 was CHF254 million.

According to reports, TEL is paying US$275 million for Oerlikon Solar.
Parent company, Oerlikon reported full-year 2011 results on Monday, 5th March, highlighting a ‘lack of customer investment in solar module production lines,’ that resulted in an EBIT loss for Oerlikon Solar of CHF 10 million, while sales increased 27% to CHF323 million, compared to CHF230  million in 2010. 
Increased sales had been supported by a number of previously placed orders being shipped, highlighted by a decrease in its backlog by CHF 130 million. 
Order intake in 2011 was CHF202 million, down 12%, compared to the prior year. 


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