Applied Materials turnkey exit highlights control held by top tier cell makers in PV tool adoption

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

This guest blog contribution is from Charles Annis, vice president of manufacturing research and Finlay Colville, senior analyst at Solarbuzz, which provides further insight into the news that Applied Materials is exiting the turnkey thin-film business and refocusing its PV technology efforts.

It seemed like the perfect fit. Applied Materials had more experience depositing high quality silicon thin films on large glass substrates than any other company in the world. For the production of TFT LCDs, the company makes the highest performance, highest productivity PECVD tools available; it has maintained a market share of around 80% for almost the entire history of the TFT LCD industry.

So in 2006, as the silicon shortage was becoming acute, solar cell supply was growing tight, top tier solar cell manufacturers were consistently returning 20% net margins and scrambling to add capacity as fast as possible, Applied Materials offered what seemed like a perfect solution. For new companies trying to jump into solar cell manufacturing, the ‘SunFab’ turn-key thin-film Si (TF Si) line seemed to provide answers to all of their needs. The technology wasn’t tied to volatile Si prices. It produced the biggest solar modules in the world; promising economies of scale for the large utility market. And it included a guarantee from one of the most reliable high tech capital equipment companies in the world.

But, on July 21, 2010 almost four years after it announced its “Going Solar” strategy, Applied Materials announced it “will discontinue sales to new customers of its SunFab fully-integrated lines for manufacturing thin-film solar panels”.

At this point the news is not much of a surprise. Clearly the company has struggled to sign up new customers since the later part of 2008 and there has been plenty of recent media speculation that an exit strategy was in the works.

Mike Splinter, chairman and CEO of Applied Materials explained, “The thin-film market has been negatively impacted by several factors, including delays in utility-scale solar adoption, solar panel manufacturers’ challenges in obtaining affordable capital, changes and uncertainty in government renewable energy policies, and competitive pressure from crystalline silicon technologies.”

Certainly, the rapid drop in c-Si module prices in the past two years significantly eroded the competitiveness of TF Si, but there probably were other contributing factors too.

• Regardless of module costs, the competitiveness of TF Si at less than 10% conversion efficiency is severely compromised by high balance of systems (BOS) costs. And although some customers were using a tandem junction process, module efficiencies were probably 8.5% at best. Movement up the efficiency curve was too slow to keep up with rapidly changing end market dynamics.

• A window of opportunity existed in 2007 and the first half of 2008. Early SunFab users Sunfilm, Moser Baer and T-Solar all had machines installed in 2007. Typically, AMAT LCD CVD users are able to start up a new fab in four to seven months, but according to the Solarbuzz quarterly PV equipment report, the fastest SunFab early adopter install to being mass production ready was 17 months. And by that time, it was already into the second half of 2008. If the product had been more mature when sales began, there may have been room to both start generating cash flow and work costs down.

• The most successful solar cell makers develop their technology in conjunction with their product portfolio and target markets. They work with equipment makers to help them fulfill their roadmap. That is one way they can differentiate their business. Most of the SunFab customers were not top tier solar cell manufacturers. AMAT was driving the roadmap on technology and customers were left with little flexibility in their business strategy as the market has shifted.

Are these issues an indictment for the rest of TF Si? The continuous price declines in c-Si modules are surely a challenge for all TF Si producers. But we still believe some producers have viable high-efficiency multi-junction TF Si roadmaps that may keep them competitive. Oerlikon Solar continues to present impressive US$0.70/W costs for turnkey lines that will ship by the end of 2010. And all TF Si companies continue to emphasize the potential for higher energy output in hot operating and low light environments; potentially making the technology more productive than c-Si in some applications.

Applied is exiting the turnkey business, but still has strong ambitions to make its environmental solutions division, including solar, a pillar of its future growth strategy. The company will continue to offer its c-Si equipment as well as individual thin-film tools and support existing customers.

The top 20 solar cell manufacturers don’t typically buy off the shelf turnkey solutions anyway and we see a growing trend for all makers to pick and choose individual tools for their specific needs. Although the scale may be smaller compared to big turnkey orders, AMAT is expected to do just fine selling individual PV process tools, like its industry leading Baccini screen-printers which are seeing renewed market demand within emerging c-Si high-efficiency and selective emitter concepts for back-end metallization pattern alignment. 

10 November 2021
The solar tracker market continues to mature at breakneck speed, with designs and component selections becoming ever-more complex in the pursuit of better project economics. But a more simplistic design could deliver a triple benefit of lower Capex, EPC and Opex costs. This webinar will set out the ideal single axis tracker design for utility-scale solar farms. The design leapfrogs from decades of experience, with a comprehensive understanding and attention to the three cost structures of Capex, EPC and Opx. Sun and Steel Solar has prototyped a single axis tracker designed to deliver up to US$0.03/W in real savings compared to existing single axis trackers on the market. That’s US$30 million for every gigawatt deployed.
15 November 2021
The 10th edition of the famous Metallization and Interconnection Workshop, MIW2021, will take place in the Thor Central venue in Genk, Belgium, on Monday, November 15, and Tuesday, November 16, 2021 as a face-to-face meeting. We are longing for direct exchange of knowledge and ideas after a long time. Hopefully you can be part of it! But of course, the organizors will keep an eye on the evolution of the Covid pandemic. It will be assess carefully, whether the workshop can be held without major risks or excessive restrictions. We are looking forward to exciting talks, discussions and meetings and to welcoming you in Genk!
23 November 2021
The solar, storage and EV industries in the UK are going from strength to strength. There is no better place for the community to meet, share ideas and do business than Solar & Storage Live from 23-25 November at the NEC.There’s something for everyone; more than 150 exhibitors, a high-level conference, a start up and innovation zone, a poster zone, strategic partners to network with and much more. 
1 December 2021
Understand fully the technical and logistical supply chains that determine the production and performance of solar modules, including all related factors impacting quality, reliability & bankability. This event will be run online with streamed content, access to session recordings and chat/messaging tools for delegates to connect.
2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.

Read Next

October 21, 2021
A round-up of the latest news from the US solar market, featuring project financing from Cypress Creek and DE Shaw, SolarEdge project launches and solar loan securitisations from Sunnova and Mosaic.
PV Tech Premium
October 21, 2021
Chinese power restrictions are likely to change in Q1 next year and will consider the power necessity and industrial demand of certain regions. Nonetheless, polysilicon prices will remain high well into next year and could rise even further.  And, distributed solar is the future of solar PV generation in China.
October 21, 2021
US utility Hawaiian Electric is seeking proposals from resources including solar-plus-storage as part of its latest “all-source” renewables procurement round.
October 21, 2021
Tesla solar installations jumped by 46% year-on-year but fell slightly sequentially to 83MW in Q3 as the clean tech giant targeting greater profitability from its energy division.
October 20, 2021
Spain’s latest renewables auction closed with solar PV bidders being awarded just 866MW of capacity, with players such as Naturgy and Bruc among the winning participants.
October 20, 2021
The main shareholder of Falck Renewables is selling its controlling stake in the solar and wind developer to an investor advised by JP Morgan Investment Management.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021