Chasing the Sun

The solar-energy market is getting some new participants.
Memory-chip makers are turning to the manufacture of solar products because of similarities between the products and the ability to reuse raw materials.
Munich-based Qimonda AG says it will branch into making solar cells and expects to begin production in the second half of 2009. Qimonda partnered with Centrosolar Group AG, a German maker of solar modules, to set up a 100-megawatt solar-cell factory in Portugal, where Qimonda already has a semiconductor facility. The companies signed a deal with LDK Solar Co., which will supply 540 megawatts worth of wafers and polysilicon over five years starting in 2009.
"Barriers to entry are quite low, with an expected high return," says Henry Becker, president of Qimonda North America, about getting into the solar business. "That makes for a great business case." The new initiative also could make up for Qimonda's current tough times in the chip market.
Other beneficiaries of the solar boom include makers of parts used in solar cells. GT Solar International Inc. has a $1.1 billion in order backlog for its furnaces and reactors. Ceradyne Inc. expects a fivefold increase in the sales of its ceramic crucibles to the solar industry this year to between $50 million and $60 million. The Costa Mesa, Calif., company makes ceramic materials for such applications as armor on military vehicles. In the solar industry, ceramic crucibles are used to cast solar cells.
"We could sell more if we could make more right now, and so we are expanding both in Atlanta [where the firm has a plant] and in China," Joel P. Moskowitz, Ceradyne's chairman, CEO and president, said on a recent earnings call with investors.
Newport Corp. expects to triple sales of lasers and other tools this year to $30 million, as it struggles to keep overall margins from falling. Prices of other types of lasers have been falling, making the solar market attractive to laser makers. The Irvine, Calif., firm is due this year to open a plant in Germany, focused on instruments for the solar market.
Another maker of solar equipment seeing rapid expansion is MKS Instruments Inc. of Andover, Mass. The firm expects revenue from solar equipment this year to rise to double or triple its 2007 level of $17 million. The move comes as demand for MKS's products is declining in the semiconductor market because of decreased spending in the industry.
--Ms. Chernova and Mr. Shieber are reporters in Jersey City, N.J., for Clean Technology Investor, a newsletter published by Dow Jones & Co. They can be reached at yuliya.chernova@dowjones.com and jonathan.shieber@dowjones.com.