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Applied Materials' conference call reveals more of solar strategy, story behind HCT acquisition |
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Jun 26, 2007 at 04:18 PM |
Applied Materials announced earlier today that it will be acquiring HCT Shaping Systems for about $475 million in cash and should close the deal by the end of the parent company's fourth fiscal quarter.
The privately held Swiss company is one of the market leaders in wire saws and other precision-wafering tools used to slice and square crystalline-silicon solar wafers. In a just-completed conference call for analysts and other interested parties, Applied's Mike Splinter, George Davis, and Mark Pinto talked about the deal, with Pinto fielding most of the questions from the call-in participants.
Despite the absence of the trade press from the Q&A session, there were some good questions asked. The deal represents a deeper involvement in the c-Si side of the solar biz for Applied, which has been trumpeting its thin-film-on-glass photovoltaic skills more of late. Another mantra can be added to the company's chant of reducing the cost per watt: reducing the grams of silicon needed per watt. How is this done? More wafer thinning, better silicon waste capture, lower consumables cost (which is a pretty big chunk of overall costs), better yields and factory productivity, and decreased overall manufacturing costs.
Here's a few tidbits from the Q&A (most of the A's can be attributed to Pinto):
- HCT has an installed base of more than 500 tools, at both PV cell and module manufacturers, with some business in the semiconductor space. The wafers produced are in the 200-micron-thick range. Each saw tool contains more than 100 kilometers of wire on a spool (!) and uses 1000 wires at once in an intricate process to cut through the silicon ingot and produce the wafers. Materials costs, especially the crystalline silicon/poly portion, can account for at least 50% of the module cost/watt. Applied believes HCT's saws already have the leading cost of ownership and productivity performance and sees even more ways to optimize them.
- Wafering systems will be increasingly integrated into the cell-production lines, since it costs too much and it's very risky to ship ever-larger quantities of ever-thinner wafers to huge gigawatt-scale fabs. Said wafers will be thinned down to less than 120 microns in the next 3 to 5 years, although conversion efficiencies get dicey around 100 microns.
- Wafer bowing of sub-200-micron-thick wafers is a problem, but Applied plans to develop clever automation and process sequences (since many current processes don't look to scale to the thinner wafers) that will treat those thin wafers with TLC so that they don't bow.
- Speaking of processes, although some have complained about PECVD's lack of throughput and relative expense, Applied doesn't see an alternative for the foreseeable.
- Wafer-saw factories are capacity constrained, including HCT's, so Applied should be able to help efficiencies and improve on the current 18-24-month lead/cycle times.
- With the acquisition, Applied now has a shot at about 25-30% of a c-Si solar fab's total combined (pre- and postcell manufacturing) cap-ex budget.
- Don't be surprised to hear Pinto and other Applied execs use the following phrase alot in the near future: "Developing technologies with sustainable differentiation." Apparently, HCT has such differentiated tech.
- During the conference call, there was no mention of Applied execs opening Swiss bank accounts nor was there any mention of participation by Applied in the opening of CERN's Large Hadron Collider particle accelerator next year. Also, Roger Federer's Wimbledon prospects were not discussed during the call nor were his holdings---or lack thereof---in HCT.
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