Motech

UMC establishes new firm for solar investments

Posted on by matthewlim

Just 2 weeks ago, I wrote that TSMC is allocating $50 million for solar investments. Now, Reuters reported on 24 Aug 2009 that UMC, the world’s no. 2 contract chip maker is following sector leader and rival TSMC to diversify into solar-related markets.

UMC’s board approved a plan to establish a wholly owned investment company, UMC New Business Investment Corp, which would be capitalized at T$1.5 billion ($46 million) and invest in solar and LED markets. UMC will also set up a new business development center and Chen Wen-yang, a senior UMC vice president will be in charge of its operation.

The firm says that Chen will leverage his experience in the semiconductor industry to conduct evaluations on various investments. He will also be responsible for the integration, management and utilization of human resources, technology and capital. The new center aims to focus on industry sectors with high growth and profit potential. UMC New Business Investment Corp will then target timely strategic investment on the basis of the center’s evaluations.

Comment: TSMC and UMC which has combined 60% market share (TSMC – 45%, UMC – 15%) in the semiconductor chip industry is entering the solar industry which is currently in the state of massive oversupply. Is it too late to enter the industry where China is leading the solar production? Possibly they will use the same model of making chips mostly for those who do not own factories (we call them fabless companies) to the solar industry where the companies currently have their own factories/fabs. Only some companies like BP Solar and SunPower have recently outsource their solar panel production to contract manufacturers. Taiwanese companies which are well-known for contract manufacturing for items such as chips, computers, mobile phones and other electrical items will definitely eye for a piece of pie in the solar industry. Motech and Gintech Energy are currently the only Taiwanese companies in the top 10 PV companies in the world.

Sources:
UMC to set up new firm for solar investments
UMC, Another Chip Company With a Solar Fund
UMC establishes subsidiary targeting LED and solar investments

Solar cell production to grow 56% in 2009

Posted on by matthewlim

Reuters reported on 11 Aug 2009 that solar cell manufacturing capacity will grow 59% in 2009 despite weakened demand for renewable energy projects in the face of tight credit markets and a global economic recession in a report issued by research group DisplaySearch. DisplaySearch joined the solar market research bandwagon when it released its first Quarterly PV Cell Capacity Database & Trends Report on 11 Aug 2009.

Summary of the report:
1. Cell manufacturing capacity will reach 17 GW this year and will surpass 42 GW by 2013, growing at a rate of 49% per year.
2. While demand for PV panels is shrinking 17% this year and enormous oversupply eroded prices, the solar industry will begin working through the excess capacity as demand recovers next year and takes off in 2011 and beyond.
3. From Jan 2008 to July 2009, about 11.4 GW of new solar cell capacity was installed worldwide.
4. The report named First Solar as the largest solar cell manufacturer with more than 1 GW of capacity. Q-Cells and Suntech Power come in second.
5. By 2013, these companies and JA Solar Holdings, Motech Industries, Renewable Energy Corp (REC), SunPower, Yingli Green Energy Holding, Showa Shell Sekiyu KK and Sharp Corp may be among the top 10 makers, with more than 16 GW or 38% of total capacity in 2013.
6. Through 2006, Japan had the largest solar cell production capacity in the world. However, Chinese companies started to ramp up a host of new facilities in 2005 and by 2007 had more solar cell capacity on line than any other country. China has continued to invest heavily in production facilities, about a third of the worldwide cell capacity in 2009 and is forecast to be the main region for cell production well into the future.
7. In 2005, 95% of solar cell manufacturing capacity was for crystalline silicon solar cells and 5% for thin film solar cells. In 2009, thin film will account for more than 20% of capacity. By 2013, thin film technologies are forecast to account for as much as 30% of solar cell capacity.

Top PV Companies in the world

Posted on by matthewlim

The following table is the top 10 photovoltaic device suppliers in 2008:

IC Insights 2008 Solar Ranking Table

Another research firm, iSuppli, ranked the top 20 global solar companies in Q1-2008 by production in 2007 and by announced production capacity 2010:

Top 20 PV_iSuppli
Top 10 Suppliers of PV Manufacturing Supplier in 2008 by VLSI Research:

VLSI PV Mfg Equipment Top 10 Suppliers

The following is summarized from IC Insights Research Bulletin 2009 report Solar Energy: Growth Oppor­tu­ni­ties for the Semi­con­duc­tor Industry:

1. Japan’s sup­pli­ers of solar PV cells and pan­els, which dom­i­nated the indus­try for many years, slipped in the sup­plier rank­ings in 2008.

2. Sharp was the No. 1 PV device sup­plier in 2006 and for sev­eral years before that but was overtaken by Q-Cells and Sun­tech Power Hold­ings in 2007. First Solar blew past both Sharp and Sun­tech, push­ing Sharp down to No. 4 in 2008 rankings, which are based on peak-megawatt value of the PV devices pro­duced and sold by each supplier.

3. Sharp was not the only Japan­ese sup­plier whose posi­tion declined in the 2008 rank­ing. Kyocera Corp. slipped from the No. 5 spot in 2007 to No. 6 in 2008. Sanyo, which was No. 7 in 2007, did not make top 10 in 2008. Mit­subishi also dropped in the ranking.

4. Future rank­ings are expected to show sig­nif­i­cant changes due to small incre­ments that sep­a­rate the top play­ers. The top 4 sup­pli­ers all achieved mar­ket­ share (based on MW sales) between 8.0% and 9.5%. A sec­ond tier of sup­pli­ers, formed by those ranked No. 5 to No. 10, have between 4% and 5% mar­ket­ share.

5. Other than First Solar, the ris­ers in the top 10 list were exclu­sively sup­pli­ers based in China or Tai­wan. Although Sun­tech slipped from No. 2 to No. 3, JA Solar Hold­ings rose from No. 10 to No. 7 in based on 109% growth in MW sales in 2008. Yingli Green Energy Hold­ing advanced from No. 9 to No. 8 on the strength of 93% growth.

6. In Tai­wan, Motech Indus­tries mov­ed from No. 6 to No. 5 thanks to a 67% increase in MW sales. But per­haps more impres­sive was the per­for­mance of Gin­tech Energy, which equaled First Solar’s growth of 144% in MW sales in 2008, pulling itself up from No. 12 to No. 8.

7. Gin­tech, like JA Solar, makes solar cells only; these 2 com­pa­nies fol­low the busi­ness model of top-ranked Q-Cells, which has only recently started to diver­sify beyond pure-play PV cell man­u­fac­tur­ing. Other sup­pli­ers are involved in panel man­u­fac­tur­ing, sys­tem instal­la­tions, and other aspects of the solar value chain.

8. No. 10 Solar World AG, a Ger­man com­pany that holds the dis­tinc­tion of being the biggest man­u­fac­turer of PV cells in the U.S., thanks to the recent expan­sion of its plant in Hills­boro, Ore­gon.

9. A U.S.-headquartered cell man­u­fac­turer, Sun­Power, almost made it into the top 10 in 2008, but Sun­Power man­u­fac­tures its cells in plants in the Philippines.

Comment: Chinese and Taiwanese rise up in the ranking as they are able to compete on cost, unlike Germany and Japan. I post here a map of PV manufacturer locations in China. Not sure how dated is the map but if you’re looking for JA Solar, you should look for “Jing Ao Solar” in the map:

Locations of Major PV Manufacturers China

GE Equity

Posted on by matthewlim

About: GE Equity is the private equity investment arm of General Electric Capital Corp. specializing in buyouts, co-investments, secondary direct purchases, recapitalizations, limited partner investments, and growth capital investments. The firm invests in aerospace, clean technology, communications, energy, entertainment, financial services, business services, healthcare, media, satellites, security, sensing technology, transportation, and water. It seeks to invest in companies based in Asia, Europe, Latin America, Middle East, and North America. GE Equity was founded in 1995 and is based in Stamford, Connecticut with offices across the United States, Europe, South America, Australia, and Asia.

www.geequity.com
Note: Sometimes GE Equity is referred as “GE Capital, Equity” on its website.

Key Personnel:
Sherwood Dodge, President & CEO
Frank Ertl, CFO

Portfolio:
The website doesn’t list its portfolio but its recent transactions (though it’s only updated to 2007 only). From the list, I selected a few companies related to cleantech:
China High Speed Transmission Equipment Group (description: $22,100,000 Growth Capital investment in wind turbine gear box supplier in Feb & July 2007), Motech Industries (description: $20,500,000 Growth Capital investment in Taiwanese solar cell manufacturer in June 2007), Think (description: €3,000,000 Growth Capital in manufacturer of electric vehicles in December 2007).

News: In January 2009, TPI Composites, Inc., a supplier of wind turbine blades to Mitsubishi Power Systems and GE, announced it has received $20 million from GE’s investment arm, Landmark Growth Capital Partners, NGP Energy Technology Partners and Angeleno Group to support its growth. The Series B funding reflects an increase in the company’s valuation since Series A financing was completed a year earlier. The capital comes from GE’s Equity unit and GE Energy Financial Services, which has made several venture capital investments in wind turbine component manufacturers as well as provided project finance for wind farms.

Comment: I’ll look at GE Energy Financial Services in separate blog as it has its own Renewable Energy and Venture Capital portfolio. The press releases for both GE Equity and GE Energy Financial Services are found in its main GE website instead. www.ge.com

ge equity