Thin Film Technology came into prominence with Polysilicon Prices ruling at $400/kg
Solar Thin Film Technology is supposed to be the 2nd Generation successor to the mainstream Crystalline Silicon (c-Si) Technology which accounts for around 85% of world production.With Polysilicon(c-Si raw material) being priced at an exorbitant $400/kg in 2008 (cost of $30/kg) due to supply shortages,many companies entered the Thin Film space attracted by the huge profits in the solar industry.Applied Materials with its SunFab turnkey amorphous silicon (a-Si) equipment capitalized on this opportunity, lining up a number of customers with some customer orders in the range of a Billion Dollars.Oerlikon Solar was the other major thin film equipment market winning customers in Europe and China.Sky high poly prices also gave birth to numerous Thin Film startups planning to Manufacture and Use their own equipment rather than selling it .
Polysilicon Prices crashed to $50/kg turning Business Models Upside Down
With the Polysilicon prices crashing by almost 90% in the intervening 2 years (due to entry of multiple players) to $50/kg at present,most of these business models have become defunct.With the exception of market leader First Solar,no other thin film player has managed to penetrate the top 15 solar croducer rankings.Most of the thin film divisions of larger companies have already been written off while smaller startups are struggling to survive with mainstream c-Si module prices down by more than 50%.
Weaker Companies/Divisions that are seeing Tough Times/Gone out of Business
- Applied Materials is perhaps the biggest loser with the managment all but giving up on its Thin Film Equipment Division (SunFab).This turnkey technology has failed to keep up with the decline in costs and improvment in Technology.With most of its customers already writing off their investments,AMAT too has reduced support to SunFab
- Oerlikon Solar like AMAT had bet its future on supplying a-Si Thin Film Equipment to customers and was giving Applied Materials tough competition.However the falling poly prices have resulted in sharp order cuts for Oerlikon and the survival of its thin film division too is in doubt
- Q-Cells has written off its investments in 2 of its thin film divisions -Calyxo (CdTe) and Sunfilm (aSi).Only Solibro (CIGS) division has survived the major restructuring of Q-Cells which saw a multi billion dollar loss in 2009 and resignation of its CEO.
- Suntech a-Si Division which was set up in Shanghai with a SunFab equipment from Applied Materials has been written off according to the management and will be retooled to manufacture high efficiency c-Si cells.
- Moser Baer was one of the first customers of Applied Materials SunFab Line.However the company had problems in ramping up its line.Recent results do not inspire any confidence in the success of its thin film venture
- Signet Solar was one of the best known a-Si startups with a strong management team.However like other SunFab customers it is too facing a bleak future with recent news of cancellation of its expansion plans
- Sanyo had set up a JV with Nippon Oil with grandiose plans to manufacture a-Si panels with a planned 1 GW capacity by2015.This JV Sanyo Eneos too is deferring its expansion plans with the cost/efficiency metrics not being competetive against c-Si modules
- Masdar PV the Abu Dhabi backed Renewable Energy company is facing problems with it its thin film business,recently firing top executives at its German thin film division
Thin Film Technology Survivors have Huge Potential
Despite problems besetting the majority of the thin film industry there are bright spots for Thin Film Technology.First Solar with its CdTe technology is the world’s largest producer of solar modules with the lowest cost.Sharp is still committed to its a-Si plant in Japan while other smaller startups continue to ramp up.Miasole made a major splash announcing a record breaking 13.8% efficiency thin film module which it will ship in 2011 .Solyndra and Nanosolar are other hyped startups though their business models are yet to be validated.There are also Abound Solar,GE backed Primestar and Q-Cells Solibro that have strong potential to compete with c-Si technology.Thin Film Technology has greater potential for technology improvements and cost reduction than c-Si technology but it will take 3-4 years before this technology matures enough to replace the older c-Si Technology.