Last week, I was very fortunate enough to be able to get into a conversation with Dr. Robert N. Castellano, president of The Information Network, based in New Tripoli, USA. It all started with a column, which he writes regularly in “The Street.” One of the recent colums of Dr. Castellano touched upon –- What could make solar hot again?
How to rectify the solar cell oversupply?
He said: “The problem will rectify itself when demand catches up with supply, which will take several years. Until then, suppliers are faced with lower prices and margins. I was the first to point out on March 5 2008, in my blog on Seeking Alpha in an article entitled “Contradictions in the Solar Industry” that “The solar industry is faced with a huge oversupply of solar panels planned for production in 2008, but no one seems to notice… or care. Shares in many solar companies such as Evergreen Solar), First Solar SunPower, and Suntech Power have surged with the booming solar market.”
Six reasons for cloudy solar skies
1. With oil at $60 a barrel, who cares about alternative energy? It is a short sighted view, but with the credit market crunch, who can get a loan to build solar plants anyway?”
Have companies been overlooking inventory problems?
Dr. Castellano said: “The solar companies were benefiting from the low price of polysilicon as a result of excess inventory in that sector. They were renegotiating contract prices with the poly suppliers and dropping prices. With money in place, they continued to build capacity well into 2009. All the factors discussed above took everyone by surprise (witness the stock market crash) and the recession has lasted much longer than initially forecast.
Where does this place a-Si solar cell makers?
“The issue is the economics in a solar farm where they are installed. The installation price is the same as a polycrystalline panel. Since the efficiency is lower and it takes more panels to reach the same wattage as polycrystalline, it also takes more hook-ups and frames during installation.
“If the panels move, there is another factor in the motors to move them. However, the production cost is lower than the polycrystalline panels. Oerlikon, expects its lines will deliver a cost of 70 cents per watt by the end of 2010 and has achieved an initial conversion efficiency of 11 percent, which comes out to about 9.5 percent of stabilized efficiency.”
Crystalline vs. thin film capacity
Dr. Castellano said: “Until last year, Germany had been the world’s largest solar market thanks to its feed-in tariffs, which require utilities to buy all the solar energy produced at premium, government-set prices. As a result, analysts now expect Germany, which doesn’t have an annual cap like the one in Spain, to become the biggest market again in 2009.Germany installed 1.35 gigawatts of solar energy systems in 2008, and it could add another 1.5 gigawatts in 2009.
“Spain took the lead last year, but the government has since reduced the subsidies and capped the amount of energy that could be sold under the subsidy program. The financial market crisis has made it difficult for developers to line up financing for solar power projects. Spain, which added a few gigawatts of solar in 2008 alone, now has a 500-megawatt cap for 2009. All of these forces have led to an oversupply of silicon panels.
“As governments — Germany and Spain were a driving force – in the solar industry’s run-up, they were a factor in the downturn. Once the recession is over and liquidity returns, they will mitigate the overcapacity, particularly as prices are so low and there is pent-up demand for new installations.”
Impact of Q4 on overall prices and industry
Dr. Castellano said that silicon used to sell for more than $300 per kilogram on the spot market and $150 per kilogram for long-term contracts a few years ago. Silicon prices have since fallen significantly over the past year. In fact, the long-term contract price has dropped about 50 percent, close to the spot market price of $67 per kilogram, or about $0.50 per watt.
“Polysilicon panels are selling at $2.25 to $2.50 per watt from $4.17 in Q2 2008. We expect prices to decline further throughout the remainder of the year,” he noted.
Thanks to Jon Cassell and Debra Jaramilla, I was able to get in a conversation with Stefan de Haan, senior analyst, iSuppli Corp., regarding the global solar PV industry. Recently, iSuppli had provided guidance on how “Half of all solar panels made this year won’t be installed in 2009!”
Correcting solar cell manufacturing oversupply
Previously committed capacity expansions have caused solar cell manufacturing oversupply. Why and how can this be corrected?
According to Stefan de Hann, the cell suppliers are already reacting, i.e., cutting back on production and delaying expansion plans. Nevertheless, a consolidation will take place, since prices won’t recover. Production cost is the key to be among the survivors. However, 2009 will see the peak of the cell/module oversupply. From 2010 on, the situation will ease slowly.
If that were the case, weren’t the companies doing enough to check all of this during the downturn of Q4-08?
de Haan added that at the end of last year (record year 2008!), everybody still expected continuous strong demand. “It took most companies longer to realize that their enormous growth expectations were not realistic. We were the first to predict the current scenario already in summer 2008, but the nearly all the companies I talked to at the PVSEC in September 2008 didn’t share this view at all.”
So, therefore, they probably weren’t checking their market carefully enough, after all!
Failure of a-Si thin film solar cell makers?
Is all of this setting the stage for the failure of multiple cell manufacturers, particularly those pursuing a-Si thin film solar cells?
According to the iSuppli analyst, those suppliers relying on standard a-Si thin film lines [AMAT/Oerlikon] will definitely face problems for several quarters. “Collapsing polysilicon prices incease the pressure on these manufacturers. There will be not only excess crystalline cell production, but also excess a-Si production,” he added.
There is also a huge amount of solar cell manufacturing capacity in crystalline silicon solar cell, rather than thin film. When will this start changing and why?
de Haan advised that both crystalline and thin film production (and installation) will continue to grow for the next years. Due to lower production costs, thin film will increase its market share gradually. In iSuppli’s current projection, it sees a thin film market share of 35-40 percent in 2013, up from 15 percent in 2008.
Lessons for India?
With consolidation likely to happen in the global solar cell manufacturing industry to control or combat oversupply, where would it all leave the the talk of building new capacity in India? As we know, back home in India, various companies are betting big on this sector.
In this regard, what are the lessons to learn for the Indian solar PV industry? Bear in mind that India is a “wild card” as far as solar demand is concerned.
According to de Haan, Companies hope for huge investments in the coming years and want to be prepared. However, in the current oversupply situation, the comparatively new Indian cell and module manufacturers will suffer from dropping prices.
He advised: “For them it is important to stay flexible with regard to polysilicon and wafer purchase. These prices won’t recover either, no need for long-term commitments. Most importantly, they need to develop their domestic market. If I was an Indian module manufacturer, I would integrate downstream and enter the installation business.”
I was very fortunate to attend a webinar on solar PV a couple of days back, thanks to iSuppli, USA. The webinar looked at:
* Polysilicon — what is going on in the market?
* Cells and modules — where will the prices go?
He said: “We believe that solar is a fantastic market. It has been growing over the last four years by revenue. It will continue to grow! There are not many industries with a growth path like that! However, in last the 18 months, the supply has been disconnected from demand.”
This is exactly the point iSuppli addressed in its webinar. Dr. Wicht was accompanied by Stefan de Haan, senior analyst, photovoltaics, iSuppli.
iSuppli’s recent findings are:
* Severe supply chain imbalances exist at polysilicon/wafer and cell/module levels.
* Short term polysilicon and module prices will decrease significantly.
Polysilicon: What’s going on with supply and pricing?
If you looked at the global solar PV industry, many plants are under construction, and there are huge capacity expansion plans. There has been a dramatic decrease in production. In 2008, iSuppli estimated total production of solar PV at 60,000 metric tons. In 2009, about 100,000 metric tons will be produced!
What are the reasons for this supply situation? In 2005-06, the high margins of this industry attracted several newcomers. The cycle time to ramp up a polysilicon plant is 24-36 months, and including another 12 months to get finance, it takes about four years.
He said: “The decisions taken in year 2005-06 are coming to the market now. This is also why we see the big ramp in 2009-10. This is also the reason why the industry will have big difficulties to react on a short term notice. The polysilicon industry is a big super tanker, which has difficulties to maneuver on short term.”
Looking at the demand side of things, iSuppli showed a graph where the two curves — polysilicon supply and polysilicon demand meet, or rather cross, in early 2010. From that point on, the supply line passes the demand line. “That means, from that time onward, we definitely see prices for polysilicon decreasing,” he said.
What will happen in 2009?
The key point to note is that the ramping rates of polysilicon and solar cells are completely different! The ramping rate of polysilicon is much steeper, than on the cell side. Polysilicon is more than doubling, while the cell industry is growing at 34 percent.
According to Dr. Wicht, the gap between demand and supply is already shrinking fast in 2009, which will lead to a price decrease in 2009.
Coming to prices, the polysilicon market boasts two kinds of prices — long term and spot market. According to Dr. Wicht, the long term prices are already decreasing from around $100/kg in 2008, and it is expected to be around $80/kg in 2009.
On the other hand, the spot market price peaked in 2008 at around $400/kg. Now, it has already dropped. It will continue to drop, far beyond today’s long term contract price, which will then, from 2010 onward, make up another round of discussion. This is because companies might tend to get out of their long term contracts to secure their silicon on the spot!
Summarizing, he said that polysilicon production will increase heavily. Next, supply will pass demand from 2010 onward, and then the industry will enter the oversupply situation for the next three to four years. The polysilicon industry will also react. In fact, iSuppli anticipates a recent announcement from a solar PV company to expand production capacity would be the last for quite a while!
What about projects on the way? These projects have to come on to the market and many of those will! This is precisely the reason why the industry will see silicon passing solar cells in capacity over the next few years.
Stefan de Haan added that the output of the PV modules industry will grow. The total module prod will likely grow to 11GW this year and to 20GW in 2012. Thin film modules will continuously gain market share and it probably account for 1/3rd of the total market by 2012. Production of crystalline cells will run in parallel. It is likely to reach 9GW for 2009 and 18GW for 2012.
Commenting on the competitive landscape, he added that many new players would be entering production in 2009, especially in the thin film business. “However, the current leaders — QCells, Suntech and First Solar — will increase their edge over the competition in terms of absolute production volumes,” he said.
In general, it is a good thing that the industry is growing and that all of this capacity is coming online. However, this raises the question: can demand can keep up with the supply?
According to iSuppli, in 2009, the installation market will be flattening. In the sense, iSuppli projects that 4.2GW will be installed this year, or about 10 percent growth. However, this growth is much smaller in comparison to the previous years. Some of the reasons for slower growth in 2009 include changes in sustained feed-in tariffs and the global economic slowdown.
Hann added, “In H2-2010, module demand will probably return to the previous growth rates, of more than 20 percent per year.”
Combining demand and supply, there is a massive oversupply of modules that has already been building up since early 2008. Back in 2008, this did not impact on the module prices as there was short term heavy demand from countries like Germany and Spain, from project developers and installation companies, etc. So, this was not noticeable earlier. However, in 2009, the oversupply situation is quite serious!
As a consequence, many suppliers will not be able to react to this situation in the short term. They will still need to run their factories to try and generate some revenue and satisfy the industry. Many had bet on some strong demand coming from USA and also China.
This year, the module prices will decline. Consequently, the declining prices will also create some additional demand. However, for the next two years, this fundamental oversupply situation will not change.
How far will prices drop?
So, what are the message for 2009? First, crystalline module prices will drop to about $2.50 per watt, and second, cost is going to be the differentiating factor! This was a point emphasized strongly by the iSuppli analysts.
Further, how should companies manage this situation, where supply is disconnected by demand? According to Dr. Wicht, there is 11.1GW of module supply vs. 4.2GW of installations. “We do not see that the demand is elastic and that everything will be good after the end of 2009. The gap is too large between demand and supply, and will last till end of 2010.”
Installation capacity will surely become a bottleneck. There will be falling prices for silicon, as well as solar cells and modules. Also, the demand is not that elastic enough to absorb all modules produced.
Therefore, given this situation, what are the options for success, rather, what are the ideas to re-orient the solar PV business?
The first option could be to shut down 50 percent of production till price recovers. However, this is not a realistic option. Another could be to put expansion plans on hold. Yet another option for producers would be to become the best in class in production cost, an option, which is excellent, but difficult!
Probably, the best option would be for makers to integrate downstream. This includes new demand simulation in established markets as well as developing new markets.
Dr. Wicht said: “Anticipating bottlenecks are key for solar. The next bottlenecks are the bureaucracy and installation capacity. The production capacity would not be influential. Production cost and downstream integration are key.” He advised solar PV producers to monitor their PV market demand and supply situation regularly.
Friends and dear readers, this is my last blog post for 2008! Indeed, what a year this has been!!
Let me bid this year goodbye with a general outlook on the global solar photovoltaics industry for 2009.
iSuppli had recently put out a report on solar eclipse coming in 2009! I had blogged about the possible solar sunburn ahead, as well, earlier last week!
Another point that has interested me is: what happens to the top 20 global solar photovoltaic companies, based on iSuppli’s analysis! This blog post has perhaps been the most popular in recent times.
I was very lucky to re-associate with Dr. Henning Wicht, Senior Director, Principal Analyst, iSuppli Deutschland GmbH, in Munich, Germany, for this discussion, thanks to the efforts of Jon Cassell and Debra Jaramilla!
How bad is solar?
The first and the most obvious question: how bad is the global solar market right now and why?
According to iSuppli, bringing an end to eight consecutive years of growth, global revenue for photovoltaic (PV), panels is likely to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop!
Worldwide revenue from shipments of panels will decline to $12.9 billion in 2009, down 19.1 percent from $15.9 billion in 2008. A drop of this magnitude has not occurred in the last 10 years and likely has not happened in the entire history of the solar industry.
Dr. Henning Wicht says that the upstream part of the solar business (cell, module, etc.) will suffer from price decline due to strong oversupply. The downstream side will benefit (installation, end-user, investor, etc.) by lower system prices.
Therefore, what can the solar players do to get over this coming bad phase in 2009? Well, three things: improve the cost structure, improve the sales side, and diversify downstream… These points hold strong for all fully integrated and non-integrated solar panel suppliers as well. By the way, fully integrated solar panel suppliers are likely to suffer less severe losses than non-integrated competitors.
There must be some way around to to bring about some balance within the current imbalance in the demand and supply situation. While Dr. Wicht agrees this is a difficult one to answer this early, he adds that supply and demand are diverging heavily. “With the current trajectories even in 2012, 100 percent more modules are produced than installed,” he says. I promise to discuss this question again with the good Dr. in another six months time.
Word of wisdom
There are various support programs in place, and it is important to know whether they will continue to remain beneficial, both to support markets to become independent sustainable and to develop the regional industry.
Dr. Wicht believes the support programs are still required and beneficial. “If China, India, Mexico and other sunny regions would start to support solar installations, that could change the picture drastically,” he notes.
A note of warning for new entrants in the solar photovoltaic space! Be aware that this warning has been earlier highlighted in the global semiconductor outlook for 2009! In tune with what the various analysts have maintained earlier, iSuppli also forsees newcomers in the solar photovoltaic line having problems in getting the required credit for their projects.
What next for Europe, emerging regions?
According to iSuppli, the short-term boost in demand from Spain and Germany has kept the installation companies busy, and solar orders and module prices high. But this boom is over. So, what’s next for European players?
According to Dr. Wicht, Germany and Spain should continue their leading role as solar installation regions, even after the boom. France, Italy and Czech Republic are attractive, but still much smaller markets, he maintains.
iSuppli has also mentioned that the race to larger manufacturing scale comes to an end when the production is not sold anymore! In that case, what’s the case for the emerging nations, like China and India? Aren’t there buyers in such places?
Dr. Wicht says: “Demand in the traditional solar markets is not elastic enough to absorb all of the solar production. Potential new markets, for example, China and India, do not yet have installation capacities and administration to significantly change the global solar demand short term.”
iSuppli also feels that the newer Chinese and Taiwanese suppliers will be hit particularly hard during 2009. The reason being, many suppliers have expanded their production capacities heavily without securing equally the sales/downstream part.
Global top 20 rankings to change?
Now to the most interesting part! Most of you have read about the top 20 global solar photovoltaic suppliers. Following the iSuppli warning of a ‘solar eclipse’ in 2009, there is every likelihood that there will be changes in that table!
Dr. Wicht adds, “However, the top 10 companies are typically better placed than the competition regarding their cost structures, downstream integration and vertical integration.”
Obama’s solar plans!
Now on to yet other interesting point! The US President-elect, Barack Obama’s, New Energy for America plan could well have a significant impact on the US solar industry.
The plan’s provisions include:
• A federal renewable portfolio standard (RPS) that requires 10 percent of electricity consumed in the US to come from renewable sources by 2012.
• A $150 billion investment over 10 years in research, technology demonstration and commercial deployment of clean energy technology.
• Extension of production tax credits for five years to encourage renewable energy production.
• A cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions.
Dr. Wicht says: “We all know that Obama is in favor of renewable energy. However, he will not change a 160 percent oversupply of solar panels in 2009.”
Bumpy ride to grid parity?
On another note, and a pretty favorite one: Is it going to be a “bumpy road” to grid parity? How will the subsidies be kept going?
Dr. Wicht notes: “Subsidies will continue. It will always be a bumby road because the ramping cycles differ heavily among silicon, cells, modules and the installation capacity. Please remember that the installation business will now benefit from low module prices. It will recover some of the margins it has lost in the last years due to high module prices.”
Also, up to when will polysilicon constraints last? iSuppli had earlier indicated PV strategy changes. According to Dr. Wicht, the polysilicon prices are coming down already. “Our indication from October 2008 seems to be fairly good,” he says.
Lastly, will iSuppli be still sticking by solar, semicon investments being equal by 2010?
Dr. Wicht says: “Please let me cite again our interview in October: The investments for solar production raising up to several hundreds of Mio USD, up to 1 Bio $ per production site. That is coming close to a semiconductor fab. The total capex of semiconductor is still 10 times larger than PV. However, PV is rising much faster.”
That will be all for this year, folks!
Look forward to sharing much more captivating moments in semiconductors, electronics, solar photovoltaics, telecom, etc., in 2009!
Wishing all of you a very happy, prosperous and successful 2009. Be safe and look after yourself! See you next year!!
iSuppli’s just issued a warning that 2009 could well see the coming of a solar market eclipse!
Come to think of it! Just last week, in the Semiconductor International webcast, the analysts did mention that there could be tough times ahead for solar! In fact, Aida Jebens, Senior Economist, VLSI Research Inc., did indicate that solar/PV would pick up in the next two years and that 2009 could be a tough year.
If you look at the India situation, I have been getting the feeling all the time that all of a sudden, too many companies were entering this market segment, as though it is a land of promised gold! Perhaps, it is, and one sincerely wishes that all of those investments proposed for solar do not come unstuck.
This August, following the announcement of the national semiconductor policy (the Special Incentive Package Scheme, or SIPS), the government of India received 12 proposals amounting to a total investment of Rs. 92,915.38 crore. Ten of these proposals were for solar/PV, from: KSK Surya (Rs. 3,211 crore), Lanco Solar (Rs. 12,938 crore), PV Technologies India (Rs. 6,000 crore), Phoenix Solar India (Rs.1,200 crore), Reliance Industries (Rs.11,631 crore), Signet Solar (Rs. 9,672 crore), Solar Semiconductor (Rs.11,821 crore), TF Solar Power (Rs. 2,348 crore), Tata BP Solar India (Rs. 1,692.80 crore), and Titan Energy System (Rs. 5,880.58 crore).
Then, late September, Vavasi Telegence (Rs. 39,000 crore), EPV Solar (Rs. 4,000 crore), and Lanco Solar (Rs. 12,938 crore), also announced major investments.
Now, given the quite ruthless kind of financial crisis the world is currently engulfed in, several have raised doubts whether solar players would be able to get the credit they need. Or, would they run into rough weather?
On paper, some of these companies are big corporate houses, with several years of standing. However, reality can be quite different, and can bite! I’ve yet to hear whether all of these companies have managed to raise the requisite capital. One sure wishes that they have all been busy and will be successful!
Otherwise, all one needs to look at is iSuppli’s warning. According to iSuppli, ‘Bringing an end to eight consecutive years of growth, global revenue for photovoltaic (PV), panels is expected to plunge by nearly 20 percent in 2009, as a massive oversupply causes prices to drop.’
Will it be a case of massive oversupply in India? We haven’t exactly started. Hence, perhaps, we will come to deal with oversupply later. The key thing is to get all of these solar/PV projects off the ground!
The India Semiconductor Association (ISA), and now, SEMI India, have been promoting the solar/PV industry very aggressively. The work they’ve done so far has been commendable, and I’ve been witness to all of their activities. However, keep in mind that these are only industry associations, who can only advice, guide, debate and promote the industry, and also provide industry statistics for everyone to consume.
The real action can only happen once the proposals have been cleared by the Indian government and the players have managed to arrange for the requisite capital for their projects. The Indian fab story with SemIndia is all to familiar, and there should not be a repitition with solar/PV projects.
Therefore, the role of the government of India will be extremely critical and crucial. The good health of the Indian solar/PV industry is entirely in its hands, and not in the hands of the industry associations.
Perhaps, the Indian government could do well to look at how the Taiwan government is playing a critical role in reviving the hard hit DRAM industry and also at the German free state of Saxony, which has played a key role in financing the ailing Qimonda.
Otherwise, the Indian solar/PV industry could get hit, even before it takes off the ground! And, as a nation, we cannot afford that to happen!
India has so far has had a good story going in solar. There are hopes that solar/PV will trigger off a spate of manufacturing activities in India, besides creating lots of jobs. Don’t think we can afford to spoil all of this!
The industry in India is still very much in its infancy. Let the baby play happily in the water (solar) tub, instead of throwing the water out! This baby needs a lot of hand-holding to get stronger in the years to come.
Make no mistake, folks! The EDA guys are getting their act together to penetrate the solar/PV segment!! Magma’s YieldManager is a great example of that effort! Yes, we all know the troubles of the EDA industry as well as of the key players. However, let’s not ignore this initiative from Magma!
Recently, Magma Design Automation Inc. announced the development of a new yield enhancement software system, the YieldManager software system, which is customized for solar fabs to improve conversion efficiency, increase yield and reduce the manufacturing costs of solar cells.
Magma is collaborating with Pegasus Semiconductor-Solar to refine the product specifications and test the new product, based on Magma’s YieldManager.
This is an interesting development, especially from the point of view of the solar/PV industry! Even more significant is the entrance of the EDA community [the one being Synopsys] into solar/PV, a segment, which has witnessed a substantial amount of investments worldwide, and specifically, in India.
It was fun catching up with Ankush Oberai, VP, Failure Analysis Business Unit, Magma Design Automation, in Silicon Valley, to find out more about the YieldManager software system, what it can do for the solar/PV industry, and why Magma decided to venture into an ‘unchartered territory’.
The first and most obvious thing, why YieldManager?
Ankush Oberoi says that in semiconductors, yield impacting parameters which are regularly monitored are mostly extrinsic, i.e., from outside, such as particles, over-exposure, under-exposure and miss-processing. In solar cells, the yield impacting parameters are mostly intrinsic, that is, something built into the solar cell material which can NOT be easily seen. Thus, a different “eye” is needed to see the solar parameters. The “eye” is the YieldManager here!!!
It would NOT be either inspection tools or litho optical proximity correction (OPC) detector. The solar cell efficiency is directly influenced by electro-physics of solar materials. A YieldManger is required to monitor any changes in those efficiency impacting parameters.
The most important parameter is the lifetime of current-generating carriers. As the solar energy generates the “hole-electron” pairs, they are collected separately as electricity.
If the solar material is “dirty” with many crystalline boundaries as in thin film solar cells, the solar generated hole-electrons get pulled into those crystalline boundaries and do not contribute to the electricity generation.
“Thus, if we can find a solar yield management system to detect the very subtle change in carrier lifetime, then we are at home with a greatest Home Run in solar cell business,” he contends.
Given the EDA background, why did Magma decide on a yield management technology?
He adds that yield management technology was acquired by Magma as part of the Knights Technology acquisition in Nov 2006. Magma’s Fab Business Unit (formerly, Knights Technology) is a pioneer (since 1994) in yield management for semiconductor technology.
The product is deployed and used in leading fabs around the world to help manage production wafer yield. Yield management has also been deployed for mask making and LCD productions.
It would be interesting to know how Magma’s new product will allow solar fabs to better monitor all metrology, inspection and performance data throughout the manufacturing process.
Oberoi says: “For Si wafer solar cell, the most important parameter to monitor is the solar conversion efficiency impacting parameters. An example would be a carrier lifetime.
“If the carrier lifetime fluctuates more than normal, the solar Yield Manager will quickly examine all of the key data, i.e., metrology, inspection and performance data, to pinpoint out potential root-causes of the fluctuation problem.”
For thin film solar cell, particles, laser cutting integrity and film thickness uniformity would be main things to monitor. Those data are quite similarly collected, as in semiconductors, and would be monitored as similar ways. The Solar Yield Manager would do well as proven in semiconductors in this case.
Next, it is important to find out how will the YieldManager enable fab operators to identify and correct root causes of solar-efficiency and yield degradation caused by subtle fab processing fluctuations or instability.
According to Oberoi, the carrier lifetime, which could be caused by various factors, is the most critical parameter to monitor for achieving and maintaining the good solar conversion efficiency.
He says: “As the Solar Yield Manager carefully monitors those factors, blindly committing ~400,000 wafers a day can be eliminated, when critical process instability starts appearing and persists. The solar conversion efficiency impacting factors could be monitored differently by different solar fabs.”
Some fabs may not have capabilities to monitor those factors. The Solar Yield Manager would define those metrology and performance tool requirements, when released.
It is also interesting to learn how improving the energy conversion efficiency, reducing the manufacturing costs and increasing the yield of silicon wafer-based solar cells are critical to the growth of the solar market.
Currently, the Si wafer for solar cell costs $2~$2.5/watt due to the severe shortage of Si. The selling price of a solar cell is $3~$3.5/watt, that is, the material cost is 60~70 percent of the solar cell price.
No market or industry would prevail with the 60~70 percent material cost, adds Oberoi. Thus, every milli-watt squeezed out of a solar cell would be very critically important for proliferation of solar industry.
In order to increase the power output of a solar cell, the solar conversion efficiency must be maximized. Once maximized, sustaining the good solar efficiency is the name of the game in the solar cell manufacturing business.
The effective manufacturing cost will be drastically lowered, if bad solar cells with poor solar efficiency is minimally produced. That is, some fabs will use ~400,000 wafers a day to generate ~500 M-Watt a year, whereas some ~450,000 wafers to do the same with poorer solar efficiency.
Innovation in the solar fabrication process must be accelerated, and today, no other enterprise-wide yield enhancement software exists for solar fabs.
Oberoi says: “Solar cell is an old technology, but a very new industry, simply because not enough money was being invested. Now, money is pouring into the solar industry and products like solar Yield will start to appear. It is not known yet that anyone commercially has tried to develop a similar product.”
Global estimate of solar/PV industry
There are several publications with recent estimates. The annual solar cell installation in the world: Germany ~46 percent, Japan ~23 percent, USA ~9 percent, Spain ~6 percent, Italy ~4 percent, the rest of Europe ~1 percent, the rest of Asia, including India and China ~6 percent, and the rest of world ~5 percent in 2006.
Magma is currently in the design and implementation stages of the product and plan to have version 1.0 of the product commercially available in Q1-09. The company has targeted solar fabs based in Asia that are eager for early implementation of the solar yield product.
Right then: those planning or having solar fabs! Now’s the time to test that home run theory with the YieldManager.
This semicon blog will basically examine the key trends in microprocessors, as well as whether companies such as Xilinx — a key player in FPGAs — has any kind of role to play in the solar/PV domain.
For the record, this is the concluding part of the discussion with Vincent Ratford, Senior Vice President, Solutions Development Group, Xilinx.
First, on to solar/PV! We have been reading and hearing a lot about the rapid advances being made in solar/PV. With so much investments in solar/PV happening globally, is there a role for Xilinx to play in this segment?
Ratford said: “Perhaps! Our devices are great for prototyping new ideas and often find their way into new markets. In base stations, our devices are used to reduce the power up to 50 percent. In signal processing applications, we have a decided performance/power advantage vs. discrete signal processors. Many of these ‘Green’ applications require some form of signal and embedded processing.” Interesting, and this point needs some further examination!
Another area of main concern within the global semiconductor industry is low-power design. According to Ratford, there are a variety of ways to save system power.
He added: “We are designing features in our new products that will reduce active and standby power. We also have power-estimation and optimization tools. I would say, there is a lot more to be done in this area at all levels, software, IP and silicon.”
Ratford was however, tight-lipped about Xilinx’s product roadmap beyond the Virtex V. Obviously, we need to remain very tuned toward this!
Key microprocessor trends
Now this is another interesting area. A few weeks ago, I had received a great article from Texas Instruments, which mentioned about five key microprocessor trends today.
Microprocessors have always been among the key areas of interest for semiconductor design and development. On being quizzed on what could be the five major trends for microprocessors, Xilinx’s Ratford said: “For our embedded customers it is:
* Rising adoption of Linux.
* Increasing use of multi-core and some multi-processing.
* Accelerating trend to increase the connectivity, bandwidth and reduce the latency between the processor and the FPGA.
* Improve the OOBE (Out of the Box Experience) for non-FPGA developers.
* Reduce power.
Before signing off, my thoughts also veered toward LTE and TD-SCDMA, one 4G and the other, a 3G technology. Both these technologies have been very much in the news lately, especially, TD-SCDMA, which is currently in use at the Beijing Olympics.
As expected, Xilinx has also forayed into both LTE and TD-SCDMA spaces!
Ratford said: “Yes, we have complete reference designs for LTE and TD-SCDMA and have secured most of the prototype sockets for these air interface standards with Virtex-5. We have a very strong IP portfolio for the radio shelf and baseband and our Sytem Generator and AccelDSP tools are used extensively.”
Just about 10 odd days ago, I had blogged about building-integrated photovoltaics (BIPV)! I had also mentioned how solar/PV will be the next big story in India, with BIPV right up there at the very top!
Well, according to a published report on India Infoline, the Indian semiconductor and fab policy has attracted 12 major proposals, worth a whopping Rs. 93,000 crores!
A Press Information Bureau (PIB) release says that the Department of Information Technology (DIT), Government of India, has set up a panel of technical experts to evaluate the proposals.
The promoters will come up to the Appraisal Committee for sanction of subsidy under the scheme once they have reached the threshold limit of investment, as indicated in the guidelines of the Special Incentive Package Scheme.
A majority of these proposals — ten (10) — are for solar/PV. One proposal is for a semiconductor wafer — from Reliance Industries worth Rs. 18,521 crores, and another for TFT LCD flat panels — from Videocon Industries, worth Rs. 8,000 crores.
The 10 proposals for solar/PV are from: KSK Surya (Rs. 3,211 crores), Lanco Solar (Rs. 12,938 crores), PV Technologies India (Rs. 6,000 crores), Phoenix Solar India (Rs. 1,200 crores), Reliance Industries (Rs. 11,631 crores), Signet Solar Inc. (Rs. 9,672 crores), Solar Semiconductor (Rs. 11,821 crores), TF Solar Power (Rs. 2,348 crores), Tata BP Solar India (Rs. 1,692.80 crores), and Titan Energy System (Rs. 5,880.58 crores).
Does the Indian solar/PV story now start making some sense? It is very much in line to become the next big success story for India after the Indian telecom story!
Evidently, Reliance Industries is the major player in all of this, having proposed both a semicon wafer fab as well as a solar/PV fab. Lanco Solar, Solar Semiconductor, Signet Solar, Videocon, and PV Technologies are some of the other big players proposing to enter the Indian semiconductor/fab space.
Well, this is really great news for the Indian semiconductor industry! Further, it comes close on the heels of the announcement of the 3G spectrum policy and MNP policy by the government of India.
A few weeks ago, Dr. Madhusudan V. Atre, president, Applied Materials India, had mentioned that taking the solar/PV route was perhaps, a practical route for India to enter manufacturing. How true are those words!
Late June, I too had proposed, among others points, that Karnataka (and other Indian states) look at having some solar/PV fabs.
Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys (India) Pvt Ltd had also mentioned late June that it was too early to write off the Indian fab story. We now have the answer to that question of having fabs in India!
All of this should also excite those investors looking to enter India. The huge interest and subsequent proposals for solar/PV can also lead to India having some of its own solar farms as well!
The India Semiconductor Association should be congratulated for having made this happen. It is soon going to a year since the Indian government had announced the semiconductor policy. Now, with these mega proposals in place, maybe, we will see more investors in the Indian semicon and solar/PV fab spaces.
Top 10 Indian semicon companies review
Another interesting thought! Last year, around this time, I had prepared a list of the Top 10 Indian semiconductor companies. This particular blog has been among the most accessed.
Perhaps, a review is in order! Besides, several Indian players are beginning to make a mark, like Cosmic Circuits, SemIndia, etc. The list of August 2007 mostly had Indian design services companies. This feature of Indian design services companies dominating a top 10 list will probably continue for some more time, till all of these proposals bear fruit into concrete, productive fabs.
I am sure, with those mega investments coming into the Indian semicon wafer IC fab and solar/PV fabs, most of the companies would soon figure in any top 10 list!\
Surely, 2009 should be quite exciting as all of this means a very positive future and outlook for the Indian semiconductor industry.
The Global Semiconductor Monthly Report June 2008 from Future Horizons, states: Let the market beware; it is no longer business as usual!
I would completely agree! For instance, the industry has since long moved to fabless, and now, fabless firms are ranking among the very best. Or, even from 130nm to 22nm process nodes, or from 180mm fabs to 450mm fabs!! Fair enough?
Coming back to the industry trends, Malcom Penn, CEO, Future Horizons, says that compared with March, the IC units were up and ASPs were down in April, even after adjusting for March being a five-week month. The net result was a 7.7 percent revenue decline! Does this spell more bad news for the beleaguered chip market?
Certainly, this seems to be the industry consensus view. Always the contrarian, Future Horizons’ views are different. Here’s how! April’s results came in exactly as expected. Also, the unit rise and fall was simply the result of the engrained ‘making the quarterly number’ mentality!
Digging beneath the layers reveals a set of market fundamentals that are in remarkably strong form. The penny may not yet have dropped to the table, but, even for the chip industry ever full of surprises, let the market beware; it is no longer business as usual.
Penn says: To paraphrase the late Sir Winston Churchill’s comments on Russia, “The chip industry too is a riddle wrapped up in an enigma”. It marches to its own complex interwoven pattern of rules, each relatively simple when viewed in isolation, but contriving to interact in a volatile and unique way. Right now, the industry is at its most confused [state] for a decade, battered by a barrage of uncertainties and contradictions. Shell-shocked and confused, confidence is off the agenda … just when what is needed most is cool heads and determination.”
Be it falling cap ex, tight capacity, focus on profits, continuing strong market demand, second half seasonal effects, according to him, the forecast tea leaves all seem to be pointing in the same positive direction. Has the worm finally turned then for the industry? He thinks so! Future Horizons also thinks that the “penny has yet to drop and that the impact on the market will be seismic and dramatic”.
Earlier, the Semiconductor Industry Association (SIA) reported that worldwide sales of semiconductors of $21.8 billion in May were 7.5 percent higher than the $20.3 billion reported for May 2007, reflecting continued strong sales of consumer electronic products. May sales were 2.8 percent higher than the $21.2 billion reported for April 2008.
Do bear in mind that May is historically a strong month for semiconductor sales, as per SIA.
NAND strong minus Apple effect
DRAMeXchange has indicated in its monthly review on the DRAM segment that the NAND Flash prices are likely to gradually stabilize after mid-July pushing by lower price, new demand from 3G iPhone, smart phones and low-cost PCs.
Elsewhere, as reported by Semiconductor International, according to Semico, NAND unit shipments are likely to cross over 3.5 billion units in 2008 as against 2.5 billion units in 2007, leading to a year-over-year growth of 35 percent.
However, reflecting the memory segment’s ASP (average selling price) crunch, NAND revenues will grow 13 percent in 2008, down compared to 25 percent in 2007.” Semico has said that the NAND industry will record a growth year in 2008, without experiencing what it has called the ‘Apple effect’.
Heartening solar initiatives
The one heartening thing to note has been the various solar related initiatives that have taken place over the past month (actually, for over the year!). In fact, iSuppli has probably been spot on while analyzing that investments in solar and semiconductors could be on par by 2010!
SVTC Technologies, an independent semiconductor process-development foundry, announced that its SVTC Solar business unit has launched the Silicon Valley Photovoltaic Development Center in San Jose. Canadian Solar and LDK Solar signing a new agreement for an additional 800MW of solar wafers, besides LDK updating on its polysilicon plant in China.
National Semiconductors also entered the PV market with its SolarMagic technology that maximizes solar energy production. Evergreen Solar, a maker of solar power panels with its proprietary, low-cost String Ribbon wafer technology, signed two new long-term sales contracts. Tokyo Ohka Kogyo Co. Ltd and IBM are also collaborating to establish new, low-cost methods for developing the next generation of solar energy products.
Not be left behind, Intel too is spinning off key assets of a start-up business effort inside Intel’s New Business Initiatives group to form an independent firm called SpectraWatt.
In India, solar has been making rapid strides, especially at the Fab City in Hyderabad. There is a possibility of something similar happening in Karnataka state as well.
Indeed, semiconductors are no longer business as usual! Right?
Managing power efficiently is not a choice, but an imperative. Semiconductor content is increasing everywhere, and in fact, consumers and globalization are driving the semiconductor content in electronic systems.
A glance at the ecosystem pyramid reveals that the global electronics industry stands at US$3,200 billion, semiconductors at US$274 billion, equipment and materials at US$86 billion, and EDA at US$4.4 billion. EDA is at the heart of the electronics industry.
Subhash Bal, country director, Synopsys (India) EDA Software Pvt. Ltd, says that for low power imperatives, it is important to look at systemic factors. Energy usage and carbon emissions, especially, have been growing alarmingly, and will continue to do so for quite some time. This is largely due to uncontrolled consumption of devices and other electronic equipment. “We need to support energy usage without carbon emissions. In that respect, solar is a good solution,” he adds.
Computing is energy intensive by nature. Consider these stats — approximately 1 billion of the world’s PCs are switched on for nine hours per day, requiring 95,000MW. And of the US$250 billion spent globally each year powering computers, about 85 percent of that energy is wasted, while the computer stands idle.
Today, more devices and gadgets are being introduced, with more features and at lower prices. All of these devices demand a huge amount of battery power. Speed increases at the expense of energy consumption. Leakage has also become a major issue. There is therefore a growing need to solve power-related problems.
The Synopsys Sentaurus
Synopsys’ Sentaurus optimizes a device’s power. It also addresses photovoltaics. The Sentaurus process is an advanced 1D, 2D, and 3D process simulator for developing and optimizing silicon and compound semiconductor process technologies.
Created by combining features from Synopsys and former ISE TCAD products, together with a wide range of new features and capabilities, Sentaurus is a new-generation process simulator for addressing the challenges found in current and future process technologies. “The Sentaurus takes care of the processing part. It does modeling, 2D/3D simulation, etc. It can be applied to both semiconductors and solar,” says Bal.
Eclypse low-power solution
Synopsys’ goal is to deliver the most comprehensive solution, enabling designers to build the most advanced, low power chips and systems in the world. In the hope of achieving this, it has introduced the Eclypse low-power solution. Sharat D Kaul, sales and marketing manager, Synopsys India, highlights the fact that the Eclypse looks at the design side specifically.
The silicon-level concerns include factors such as more functionality, more computing power, limited power budget, design complexity, verification complexity, testing, reliability and schedule. System-level concerns include factors such as battery life, system cooling, reliability, packaging cost, operating cost, air conditioning cost, carbon footprint and green initiatives. Most design teams are both overwhelmed and under prepared.
The Eclypse low power solution is aimed at addressing such needs. It provides an alignment of technology, IP, methodology, services and industry standards — geared to meet the challenges of advanced low power designs.
Eclypse supports the industry-standard Unified Power Format (UPF) language, used to capture low power design requirements. It offers low power education programs, end-to-end UPF support, multi-voltage verification with assertions, automated clock tree synthesis, and automated power switch optimization.