Apollo Solar recognizes US$390 million revenues for turnkey a-Si equipment in 2010

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During 2010, media coverage of a-Si tool suppliers often outweighed that of their own customers who were hard at work seeking new business for sub-10% efficient PV panels. With much of the attention on well-known names such as Applied Materials, Oerlikon, and Ulvac, other equipment suppliers located within the Asia Pacific region moved quietly – but efficiently – into the turnkey a-Si space, clocking up a host of new orders from enthusiastic thin-film entrants. And the two equipment companies receiving most of these new orders were Jusung Engineering and Apollo Solar Energy Technology.

For anyone tracking the overall PV equipment landscape during 2010, Apollo was the company to monitor. Having entered the a-Si turnkey PV manufacturing business through the merger of RBI Holdings with Apollo Precision in November 2009, the renamed Apollo Solar quickly secured one of the largest ever PV equipment orders (contracts) — from Hanergy Holding Group — for US$2.9 billion. In fact, Hanergy was one of four new companies to place orders on Apollo for turnkey a-Si production lines in 2010.

Apollo’s PV equipment revenues recognized during 2010 were equivalent to US$390 million – a figure significantly higher than most well-established tool suppliers to the PV industry. To put this in perspective, Apollo’s 2010 PV revenues were above those of Oerlikon and Roth & Rau, and only marginally below Ulvac’s PV revenues for the year.

Furthermore, utilizing in-house deposition/sputtering tools and sourcing laser scribers locally from Han’s Laser (and Rofin-Sinar), Apollo’s solar segment gross profit margin during 2010 exceeded 69%, with a net income for this segment around US$153 million.

While final counting and full-year reporting is still ongoing, there is little doubt that Apollo’s US$390 million PV revenues will see the company comfortably within any top-10 list for PV equipment suppliers in 2010. In fact, Apollo is one of several PV equipment suppliers across the Asia Pacific region which benefited from the strong investment by tier 2 and tier 3 PV manufacturers within China last year.

Often, these manufacturers purchase equipment locally with significantly reduced tool ASPs. Apollo’s turnkey lines were ordered at between US$0.75/W to US$1/W in 2010, depending on the MW-level ordered by its new customer base.

The short-term outlook for Apollo appears encouraging. A backlog (of tool revenues recognizable within 12 months) at the US$1 billion level, a customer base hungry to match low capital costs with low operating costs, and a manufacturing base close to the a-Si action these days. But some caveats ought to be applied.

Hindsight informs us of previous GW+ a-Si turnkey backlogs within the PV industry that failed to materialize; high-volume tool ramp-up is still in its infancy period; and the prospects of its customers placing several hundred MW of new PV panels during 2011 may prove increasingly problematic at a time when tier 1 c-Si module inventories are starting to rack up.

Ultimately, equipment suppliers gain from fab investment and expansions. While new entrants continue to secure financing, turnkey suppliers like Apollo will continue to benefit – somewhat shielded in the short-term from any delays of their customers in securing downstream project business.

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