Short supply of polysilicon limiting solar market uptake

After announcing early this morning that it was acquiring Swiss precision wafering tool supplier HCT, Applied Materials held a phone call and disclosed further details of its reasoning behind the deal.

Beyond the content in the company’s statement from this morning, George Davis, Applied’s senior VP and CFO said HCT’s net sales last year were $124 million and the company has just under 200 full time employees, all of whom will join Applied’s solar group under Charlie Gay.

Also, Michael Splinter, Applied’s president and CEO said,“We see solar energy as an opportunity that positions Applied Materials for growth. I’m excited about our latest move because it’s a major step forward in our efforts to bring about new economics in solar cell manufacturing."

"Solar can unleash new growth by lowering the cost per watt to make it competitive with other forms of electricity generation. The planned acquisition of HCT is an integral part of Applied’s overall strategy to drive down the cost per watt of solar power through both crystalline silicon and thin film applications," he continued.
 
"This acquisition is also part of Applied’s overall growth strategy, where HCT will significantly expand our opportunities in crystalline silicon, photovoltaic technology sector, which currently comprises 90 percent of solar panel production," Splinter added.

Then, by way of background, Mark R. Pinto, senior VP, CTO and general manager of Applied’s new business and new products group reiterated that Applied is targeting the reduction of cost per watt, production costs of both crystalline silicon and thin film photovoltaic modules.

What really got my attention, and what may help to answer my suspicion as to why other capital equipment vendors have not entered the market for solar cell manufacturing tools was his comment, “Crystalline silicon pv is based on wafers as substrates, just like ICs, but unlike ICs, a major part of the crystalline silicon production cost comes from the starting wafers. In fact, under normal supply and demand of raw polysilicon, wafers typically make up about 50 percent of the resulting module cost per watt. And with poly in such short supply today, wafers made from poly acquired at spot market prices can make up more than 75 percent of the total module production cost.”

While I suspect this is just a piece of the puzzle, it does make sense that it could be too volatile for some equipment makers to risk entering at this time. What do you think, dear reader?

Pinto went on to explain that critical paths to reducing crystalline silicon costs per watt is to reduce the grams of silicon needed per watt. This can be be accomplished by making solar cells on thinner wafers, he said. "Thinner wafers however, have two technical challenges. First to produce them economically, that means at high throughput and low silicon wastage. Second, to handle and process these potentially delicate substrates through the downstream cell and module fabrication processes with minimum yield loss. This has to be done at ever-increasing factory scale – thousands of wafers per hour – to reach 50 to 100 megawatts of annual production. Taken together, the successful solution will provide fewer grams of silicon per watt and improve the processing of substrates while achieving a balanced cost reduction.”

Interestingly, HCT tools can cut a wafer as thin as 200-microns, thinner than silicon wafers for ICs. 

Pinto also said it was important to point out that, “as wafer thickness decreases, and production capacity concurrently increases, we expect wafering systems to be increasingly incorporated into cell automation lines instead of just at silicon production facilities to avoid complicated and costly packaging and shipping of the required volumes of the very fragile substrates.”

“As most of you know, we’ve been very active in the development of thin film silicon and PV technology. We believe these two technologies – thin film and crystalline – are complementary and will address different segments of the market: thin film for the lowest cost and crystalline silicon for area limited but still cost-sensitive applications," he continued.

"There are several reasons for thin films’ production cost advantage and one of the more significant is its avoidance of raw polysilicon and in fact the entire wafer production process in favor of minimally thick, directly deposited, silicon on glass. While we believe thin film technology will grow faster than crystalline silicon, crystalline silicon currently represents more than 90 percent of the end market due to its balance of system cost advantage for existing residential applications. And for crystalline silicon to grow, it’s imperative that silicon grams per watt along with cell per watt production costs are reduced," Pinto went on.

Finally, Pinto said that Applied expects the entire solar cell market to continue to grow rapidly worldwide at an annual compounded growth rate exceeding 30 percent into the next decade. "This is a great opportunity and the combined knowledge of Applied Materials and HCT will enable us to bring a new level of expertise to solar cell manufacturing that will further promote expansion of this market," he concluded.

–Ann Steffora Mutschler, Senior Editor