Issue Date: July 14, 2008
The Sun Shines On Electronic Materials
ELECTRONIC MATERIALS suppliers have found new pastures in the photovoltaic market. From the niche and somewhat exotic industry that it was a few years ago, solar has evolved into a major consumer of a broad range of chemicals. Companies that have expertise in serving the semiconductor and flat-panel display industries are enjoying unexpected success in the solar market as they discover that, with a few adjustments, their products meet the needs of solar-cell manufacturers.
Producers of polysilicon are getting full exposure to the solar industry's voracious appetite. "Most of the new polysilicon capacity that is now coming on-line is geared toward producing solar-grade materials," says Richard S. Doornbos, president and chief executive officer of Hemlock Semiconductor, the world's largest producer of polysilicon.
Polysilicon is the black material that is most visible when one looks at a microchip. A chip's circuitry, however, is made with monocrystalline silicon, which is polysilicon that has been crushed, melted, and grown into ingots with a singular crystal orientation. Polysilicon is also used—in monocrystalline form by some manufacturers—to capture the sun's energy on most of the photovoltaic solar cells that are sold today. Until a few years ago, demand for polysilicon from the solar industry was so low that it could be supplied from piles of scrap material deemed too impure to be sold to semiconductor manufacturers. Not anymore.
In 2008, the solar industry will consume as much polysilicon as the semiconductor industry, according to Richard M. Winegarner, president of Sage Concepts, a consulting firm focused on the polysilicon market. And because demand for polysilicon from the solar industry is growing at up to 40% annually, compared with 4 to 5% from the semiconductor industry, "the solar use of polysilicon will dominate by a factor of three or four in about 10 years," Winegarner estimates. The solar industry uses polysilicon of a purity level of 99.9999999% (seven 9s), whereas semiconductors require material that is at least nine-9s pure, he adds.
For most of its history, polysilicon production has "not been a very profitable business," Winegarner says. As a result, manufacturers were initially reluctant to expand capacity when demand from the solar industry started to pick up a few years ago. This has led to extremely tight conditions in the polysilicon market today.
A lot of new capacity is coming on-line now, giving rise to expectations that the low supply and high costs will begin to ease. Last month, Hemlock opened a 9,000-metric-ton-per-year polysilicon plant that, once fully operational by the end of the year, will bring the company's total production capacity to 19,000 metric tons. The firm expects to further raise its capacity to 36,000 metric tons in 2011 (C&EN, June 9, page 13). Wacker, the world's second-largest producer of polysilicon, is building new facilities in Germany that will raise its capacity from 10,000 metric tons this year to 22,500 metric tons by the end of 2010.
The tight market conditions have attracted completely new players. South Korea's DC Chemical, which had never operated a polysilicon plant until it commissioned its first facility last December, aspires to eclipse Wacker as the number two producer by 2009. It just announced a $1.1 billion program of capacity expansions (C&EN, July 7, page 11).
SEVERAL OTHER companies with no prior polysilicon experience are also aiming to turn themselves into major manufacturers. One example is LDK Solar, which is building a 15,000-metric-ton polysilicon plant in Xinyu, China. But established producers are skeptical.
"It will be really interesting to see how many of these new entrants are able to master this technology," Doornbos says. "Polysilicon production is a very complex process, because we are making one of the world's purest materials." Hemlock, he notes, has been making polysilicon for 40 years. LDK issued a statement earlier this month confirming that its plant construction is on schedule.
For their part, manufacturers of solar cells appear to be hedging the bet that the tight conditions in the polysilicon market will ease in the near future. To ensure that they have material when they need it, they are signing long-term supply agreements with polysilicon producers, often making large up-front payments years before getting anything out of a contract.
Polysilicon manufacturers use these downpayments to finance the construction of new facilities. At Wacker, spokesman Florian Degenhart says, some of the contracts to supply customers run until 2018. "It seems likely that the tight supply-and-demand balance will prevail until 2012," he says.
It's difficult to get an exact idea of how the supply shortfall has affected the price of polysilicon. Winegarner says the spot price of polysilicon can reach as high as $500 per kg, which is more than 10 times what the material costs to make. But prices on the spot market are misleading, he says, because almost all polysilicon is sold through long-term contracts. Hemlock's Doornbos says he can't discuss pricing.
It's clear, however, that polysilicon is an expensive material and cell manufacturers are keen to find ways to consume less of it. The main tactic so far is to use thinner polysilicon wafers. Mostly through process improvements in polysilicon slicing, solar wafers are now 180 µm thick, down from 280 µm a few years ago, Winegarner says.
At the same time, suppliers of electronic materials are putting more and more resources into R&D. Their aim is to make polysilicon-based solar cells more efficient or to help customers develop completely different solar technologies.
"Even though solar cells have been around for about 30 years, it's only in the last seven or eight years that there was really a significant amount of research dollars going into solar," says Eric Peeters, global executive director of Dow Corning's solar business. He predicts that the collective research efforts of solar industry players will halve the cost of solar cells within five years.
AS SILICON wafers get thinner, they become semitransparent, Peeters says. This opens the way for light that goes through a wafer to be redirected back into the cell, where more of the light's energy can be captured. Dow Corning has developed silicone-based confinement coatings that bounce light from the rear of a cell back into it.
The company is researching other ways to raise the efficiency and lower the cost of solar cells. One approach is to improve encapsulants, the transparent materials that let sunlight through while protecting a solar cell against corrosion and nature's elements. According to Peeters, many of the encapsulants now on the market are not that transparent to begin with and lose their transparency over time. "If you are using silicone materials with superior optical transparency and that are guaranteed for the whole 25 years of life of the solar module, it obviously leads to a higher power output," he says. In May, Dow Corning opened a solar-cell pilot plant where customers can test various encapsulants.
At present, polysilicon-based solar cells represent about 90% of the solar market, and they will dominate the industry for at least the next 10 years, Peeters says. But he notes that competing thin-film cells present some advantages. They are cheaper to make than polysilicon-based cells. And although thin-film cells are not as efficient as polysilicon cells at transforming direct sunlight into energy, Peeters says they are better at generating electricity when it's cloudy or when the sun is not directly shining on them.
At DuPont Microcircuit Materials, Andy Kao, Asia-Pacific photovoltaic segment manager, says polysilicon-based cells will represent at least 80% of the market for the next five years or more. After that, he expects that thin-film and polysilicon solar cells will both continue to grow because they each offer their own advantages.
In recent years, DuPont has invested in resources devoted to the photovoltaic market. The company offers a range of products that include encapsulation technologies, backsheets, insulation films, and resins for making cell housings. Kao also says that the company's R&D and technical workforce in Asia has been growing about 50% annually, although he won't disclose specific staffing figures. The company expects its global sales of photovoltaic materials to reach $1 billion annually within five years, up from $300 million now. Last month, it announced that it would more than double capacity in Dongguan, China, for its Solamet thick-film metallization pastes.
According to Kao, Solamet can help increase the efficiency of solar cells. He explains that the material serves as the cell's electrode, linking the electric current generated by the cell to its circuit. A bad electrode can harm the overall efficiency of a cell, he says, whereas a good one can raise it.
SOLAR CELLS and their production processes vary from manufacturer to manufacturer. DuPont scientists need to modify the properties of the Solamet paste to meet each manufacturer's performance requirement. DuPont is also collaborating with customers on new materials for thin-film cells. In some cases, Kao observes, these customers are reluctant to fully disclose the technical specifications of the cells they are developing, which creates a challenge for DuPont's scientists to come up with the right material for the job.
For thin films, the most prevalent technology presently, amorphous silicon, whose microstructure, akin to that of glass, does not have long-range crystalline regularity. Instead of relying on the comparatively expensive process of forming wafers from polysilicon, companies produce the semiconductor in an amorphous cell by silicon deposition onto a low-cost substrate such as glass. The technology is mature enough that facilities for making amorphous silicon solar cells can be bought on a turnkey basis.
Other types of thin-film cells that use rare materials like indium or telluride are on the market or under development. Dow Corning's Peeters is skeptical that these solar cells have much of a future, given the rarity of the required materials. Indium poses a particular problem. "Silicon is one of the most abundant materials on the Earth's crust, but indium is a very rare metal," he says. "Physically, it would be impossible for that technology to have a much larger share in the market because of the lack of indium that is around."
JAPAN'S Tokyo Ohka Kogyo (TOK) announced last month that it would cooperate with IBM to develop processes, materials, and equipment suitable for the production of thin-film solar cells based on copper-indium-gallium-selenide (CIGS). IBM and TOK believe that the use of CIGS provides an affordable way to raise the efficiency of thin-film cells from around 6 to 12%, where they are now, to 15% or higher. TOK spokesman Noriaki Taneichi maintains that the rarity of indium is not a problem because the IBM-TOK process does not require a large amount of it.
TOK is entering the solar business, he says, because it has developed a technology for coating large substrates in the flat-panel display industry. The coating technology, Taneichi says, is also suitable for making CIGS-based solar cells. One advantage of TOK's process, he says, is that very little material ends up as waste.
Like TOK, Applied Materials, a California-based producer of semiconductor manufacturing equipment, discovered that the expertise it developed in the electronics industry could be applied to solar cells. "Solar is a semiconductor technology, which we know from integrated circuits, and it's a large-area technology, which we know from our display business," says Peter Borden, spokesman for the company's solar business group.
The growth of Applied Materials' solar business has been phenomenal. Two years ago, Borden says, the company's solar business consisted of four people; today, it employs several hundred. This is partly due to acquisition. Last year, Applied acquired HCT Shaping Systems, a company with a technology for slicing polysilicon ingots into thin wafers. And in January, it bought Baccini, an Italian supplier of metallization systems for polysilicon-based cells. But Borden also says "Our business has been far more successful than we ever dreamed it would be."
One of the big discoveries Applied made when it began to focus on solar-cell manufacturing was that the amorphous silicon deposition machine it was already selling to flat-panel display makers could be used, with few modifications, by manufacturers of amorphous silicon solar cells. What's more, Applied executives realized that their amorphous deposition equipment could produce cells on a larger scale than the industry standard. Scale has a dramatic effect on unit costs, Borden points out.
Today, Applied is one of the main suppliers of turnkey manufacturing systems for amorphous silicon thin-film cells. At the end of May, the government of Abu Dhabi ordered three production lines from Applied that will produce enough thin-film modules annually to generate electricity to power 70,000 homes.
Borden envisages steady progress in the solar industry's ability to reduce costs and improve performance. He expects that the price reductions that occurred in the semiconductor and display industries will be repeated in the solar industry as the scale of production increases and more innovation takes place. This will be equally true for thin-film cells and wafer-based cells. "There are a number of innovations throughout the manufacturing process," he says. "Every part is undergoing innovation."
Conditions are highly favorable for the continued development of the global solar industry, Borden says. Conditions do vary from country to country. In Japan, for example, homeowners are looking for alternatives to extremely high electricity prices. In Germany and in some U.S. states, governments have created financial incentives to promote the development of solar energy. Overall, "you have issues of global warming, you have increased energy prices, and you have energy security all driving the growth," he says. "It's the perfect storm."
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