In another sign of trouble in the PV capital equipment sector, Veeco has decided to exit the CIGS solar systems business. Announced as part of the company’s second-quarter financials, the move results in a combined negative impact and backlog removal of approximately $71 million on its Q2 GAAP results.
CEO John Peeler cited “various reasons,” for the decision, “including the improved performance of mainstream solar technologies and the lower-than-expected end-market acceptance for CIGS technology to date. While CIGS remains an important thin-film solar technology, we have determined that the timeframe and cost to successful commercialization are not acceptable to Veeco.”
The company had been active in the sector, making several acquisitions and product launches over the past four years, including the purchases of toolmaker Mill Lane and CIGS developer DayStar Technologies assets in New York state and the rollout of its FastFlex and FastLine equipment systems. Veeco had also landed Global Solar, Daiyang Metal, GroupSat, and others as customers.
Veeco’s CIGS assets will be not be put up for auction however. Peeler said that the company “intends to transfer our R&D facility, pilot line, technology, and key personnel in Clifton Park, NY, to the College of Nanoscale Science and Engineering (CNSE) in order to support their planned CNSE/Sematech Photovoltaic Manufacturing Consortium (PVMC). We believe the PVMC is much-needed to drive CIGS industry roadmaps, collaboration, market acceptance, and commercialization.”
Veeco had previously been cited as a key industrial partner for the PVMC effort when DOE announced the $57 million award for the consortium’s CIGS efforts in April as part of its SunShot Initiative. The company had also been granted $4.8 million in February “to speed up its efforts to commercialize multistage thermal deposition production systems used to manufacture cost-efficient CIGS cells” as part of the program’s supply chain R&D component.
Of the more than $51 million in asset impairment and restructuring charges related to Veeco’s CIGS business exit, $33.375 million will be in the form of inventory write-off, $11.125 million in restructuring charges, and $6.211 million in asset impairment. Also, CIGS deposition systems worth about $20 million have been removed from the company’s backlog.
Effective Q3 2011, the company said it will treat its CIGS solar systems business, which operated at a loss, as a discontinued operation. “The closure of our CIGS systems business is expected to have an immediate and positive impact to Veeco’s profitability,” noted Peeler.
For the quarter, the company saw GAAP revenues reach $264.8 million, with income of $19.2 million, largely as a result of strong MOCVD equipment sales to Asian LED manufacturers.
Veeco has not abandoned all of its CIGS business, stating it will continue to sell CIGS thermal sources and other deposition components. It also claims to be a top supplier of MOCVD and MBE equipment to the concentrator photovoltaic (CPV) market.