Kit Temple, the CEO of ENF, a market research firm that analyses the global solar industry, told OBG he was optimistic about the solar cell market. “There is a strong demand for solar cells in the market.”
Photovoltaics (PV) is the term that describes converting solar energy into electricity. A solar panel is used to combine solar cells when more power is required than a single cell can provide. Alternative energies like PV are trendy areas for investors at the moment. Temple said, “The entry barriers for solar cell production are much higher than those of solar panel production, and this helps to reduce the chance of a bubble effect on the market.”
More and more Taiwanese semiconductor manufacturers are entering the market. Neo Solar Power, formed in 2005 and part of Powerchip Group, the largest DRAM (dynamic RAM) manufacturer in Taiwan, is one the companies expected to emerge as a leader in the photovoltaic solar industry. The company has stated it believes photovoltaic solar technology will become a competitive energy source by 2020.
Taiwanese companies could potentially lead the development of the solar industry thanks to compatibilities in the manufacturing process of integrated semiconductor circuits and solar cell semiconductors. This has encouraged Taiwanese firms to look at the market. Temple explained, “access to recycled material from the IC (Integrated Circuits are manufactured on the surface of semiconductor material) industry is a distinct advantage during 2007, while polysilicon is in short supply.” Polysilicon is a material consisting of small silicon crystals and a key component to the IC and semiconductor manufacturing processes as well as to the production of solar cells.
There are also some synergies between the manufacturing processes of solar cells and TFT-LCD (a variant of Liquid Crystal Display (LCD) which uses Thin-Film Transistor (TFT) technology to improve image quality) production. Taiwan and South Korea, which regularly switch places in the lead, are the world’s top producers of TFT-LCD equipment. According to reports this past summer, Taiwanese TFT-LCD manufacturers have been considering turning their old generation TFT-LCD production lines into solar cell production lines. Equipment manufacturers state it would cost $250m to upgrade a single TFT-LCD production line into one making 100 MW solar cells. This would be significantly less expensive than building new solar cell production lines.
A number of equipment suppliers have told the local press that while some equipment used in TFT-LCD production can be modified fairly easily for the production of solar cells, Taiwan does not have the integrated manufacturing experience in solar technology as they do in TFT-LCD and it would take time to build capacity.
Academic sources told the local press in late February that Taiwan’s solar industry production is expected to quadruple in value by 2010. The ministry of economic affairs announced an ambitious target of having 10% of the country’s total electricity output supplied by renewable energies by 2010.
Officials at the government-funded Industrial Technology Research Institute (ITRI), said that because of a complete upstream and downstream production capacity, Taiwan can take advantage of the growing industry. According to the local media, officials from ITRI said, “with the help of government funding over the next five years, a favourable purchase price for solar energy, and a 50% subsidy for solar energy equipment, Taiwan’s total production capacity will top 280 MW by 2010, with an estimated market value of NT$20bn ($607m) to NT$25bn ($759m).”
