Applied Materials Turn-Key Exit Highlights Control Held by Top-Tier Cell Makers in PV Tool Adoption

By Charles Annis – Vice President, Manufacturing Research, DisplaySearch and Finlay Colville, Senior Analyst, Solarbuzz

Applied Materials has more experience depositing high quality silicon thin films on large glass substrates than any other company in the world, based on its PECVD tools for the production of TFT LCDs. So it seemed to offer a credible solution to the desire to add solar cell capacity despite the silicon shortage over the past few years: the SunFab™ turn-key Thin Film Si (TF Si) line, which could produce the biggest solar modules in the world. But Applied Materials struggled to sign up customers, and on July 21, announced it was discontinuing sales of its SunFab lines to new customers.

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 as well:

• 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.
• Typically, AMAT LCD CVD users are able to start up a new fab in 4-7 months, but according to the Quarterly PV Cell Capacity Database & Trends Report, the fastest SunFab early adopter to reach mass production was 17 months. And by that time, it was already into the 2H’08. 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 thin 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 $0.70/W costs for turn-key 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 and low light operating environments; potentially making the technology more productive than c-Si in some applications.

Applied is exiting the turn-key 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 TF tools and support existing customers. The top 20 solar cell manufacturers don’t typically buy off the shelf turn-key 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 turn-key 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.