SAN JOSE, Calif. - Intel Corp.'s solar cell spinoff, SpectraWatt Inc., is apparently shutting down its operations, according to reports.
The solar cell startup is shutting down its factory in Hopewell Junction, N.Y. and is laying off 110 employees, according to online reports. The firm opened the factory in May. Those articles can be read here and here.
The company blamed the economic situation in the solar market for the shutdown. On the other hand, the solar market has rebounded after a downturn in 2009. In fact, the market is booming, leaving some to wonder if SpectraWatt's technology was not competitive.
In any case, the move is a blow for Intel, SpectraWatt and the state of New York. It is also a setback for the U.S. solar industry. Much of the new solar capacity is being constructed in China and Taiwan. The U.S. is behind in solar fabs.
In 2008, Intel said it was spinning off key assets of a solar startup business effort inside its New Business Initiatives group to form an independent company called SpectraWatt. Intel Capital, Intel's investment organization, led a $50 million investment round in SpectraWatt and was joined by Cogentrix Energy, a wholly owned subsidiary of The Goldman Sachs Group, Inc., PCG Clean Energy and Technology Fund and Solon AG.
Last year, SpectraWatt moved its operations from Oregon and established the company's first factory and its new headquarters at the Hudson Valley Research Park in Hopewell Junction, N.Y. SpectraWatt moved into a plant that was owned by IBM Corp. The solar startup reportedly retrofitted IBM's Building 334 on the IBM campus in that area.
The company hoped to be in production early in 2010. SpectraWatt's first factory line was supposed to have an initial manufacturing capacity of 60 megawatts (MW); additional lines were already being planned with site capacity exceeding 120-MW within the first two years of operation.
The company had been preparing for an official launch in the spring with customer shipments beginning in the second quarter of 2010.
In March, SpectraWatt received $41.4 million in investor funding in the form of convertible debt. Investors include Cogentrix Energy LLC, a wholly-owned subsidiary of The Goldman Sachs Group Inc., Intel Capital, PCG Clean Energy & Technology Fund and two other unnamed sources.
In May, SpectraWatt officially launched its factory in Hopewell Junction.
In June, SpectraWatt announced that they were the recipients of a research grant from the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program of National Science Foundation (NSF). The grant, which totaled nearly $150,000, was supposed to support Phase 1 of a project focused on achieving panel efficiencies of over 20 percent based on a combination of multicrystalline silicon and other materials. The project was to be conducted in the second half of 2010 at the company’s research facility in Hillsboro, Oregon.
Last month, SpectraWatt was honored in Poughkeepsie during an award ceremony hosted by the Dutchess County Economic Development Corporation (DCEDC). As the first solar cell factory in New York, the company accepted the Business Excellence Award recognizing their innovative approach to manufacturing.
thank you Fennagain for sharing your story...I agree completely...You can "easily" develop a new app or even a software company on $30M investment. You should be able to start a fabless company and design a new hot IC (although to fully develop that product line you will need probably closer to $100M)...but any developments that require advances in materials take much longer and require much higher investment...people continuously underestimate the efforts required in that case...Kris
I was very fortunate to start up a new company at the time that Paul Cook, then of Raychem, realized that it was very hard to get completely new ideas generated for real practical businesses within the Raychem culture. This was in 1983. He gave the OK to back my idea, which turned out to be Andus, one of the first companies that participated in sputter roll coating of ITO on polymer films. They were patient and let us run the company with little interference but a lot of useful commercial advice. Andus was later sold for 6X Raychem's investment.
Sputter roll coating of ITO on PET is now over a billion $/year market. But it took over 20 years and the iPhone touch panel to give it a real kick start! Paul Cook and Raychem knew what time it took to get to market in a real environment. I am very happy to have been associated with him.
The problem as I see it in PVs is not the lack of good ideas. It is the understanding that you cannot go from the lab to a 1G factory in a couple of years with "only" $30 million. When are the investors going to get REAL?
This is surprising considering this was Intel's company. It seems like they didn't invest money in reserach like they do in the chip development. What a waste of all the money that was given to them. Given it was Intel they could have probably carried this business at least for a year or two to see whether it was going to be a sucess or not. Why not invest some more money in or get additional investors to run the company for a year or two.
Dear Intel: Move it back to Oregon, additionally fund my $3M round A, and I can turn it into a market leader with a patent I just filed. Chinese are irrelevant - lack of sufficient imagination and innovation is the issue.
well put thought (both Kris and Sheetal). I recently read an article (http://www.ebnonline.com/author.asp?section_id=1038&doc_id=202229&)that Intel should diversify to keep its position as a leader in semicon so solar can be a good market to be in. But maybe it was too soon for Intel.
when i read this article i had the same thoughts as yours. If a company has to shutdown in 6 months, I would wonder on what vision they had in mind while setting it up. Solar business is very slow its a known fact and for somebody like Intel this would definitely not something they want to be in news about. Its a bad news for solar market. It would discourage many start ups in solar domain.
I just got this from a reader: ''Here's additional thoughts: The timing in starting this project is strange, because the project started after NY's Cuomo filed a lawsuit against Intel (over anti-trade issues). It seems to me that Intel was trying to get sympathy! Now the project is cancelled but we do not know yet the "verdict from the lawsuit". This can be that Intel got some "sympathy" or perhaps "slapped again." One thing that I suspect is that this solar project is a teaser!
I would (if I was an Intel stockholder) start asking a lot of ugly questions of management. The meteoric rise and fall speaks of serious missteps or a too late to stop discovery of a flaw in the planning. I could not imagine locating any production in NY or CA, it does not make any sense. Go where the costs are low and labor is available, possibly NC or Tenn? Just wondering what was really going on behind the scenes?
@realist: good comments! I would take all of your points and apply them to California as well! Here is the morphed version for a company in the Silicon Valley!
1. manufacture in CA; invite President Obama & the fanfare to go with it, months later announce layoffs, leave a brand new building empty (with city of Fremont holding the bucket!)... Solyndra any one??
2. build a non-differentiated product (ditto)
3. rely on deep pockets of your parent company (read: Uncle Sam... too bad the voters have spoken!)
4. don't have the ability to scale at a competitive cost point (ditto!)
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