SAN JOSE, Calif. - Advanced Energy Industries Inc. has announced the creation of two solar business units within the company effective Jan. 1, 2011.
The two business units, Thin Films and Renewables, will focus on the solar markets. In a statement, Hans Betz, CEO of Advanced Energy, said: “The Thin Films business unit will serve principally our OEM and end customers in the semiconductor, flat panel display, solar module and other capital equipment markets, while the Renewables business unit will focus on string, commercial and utility-scale solar projects and installations, selling primarily to distributors, EPCs (Engineering, Procurement, and Construction contractors), developers, and utility companies.''
The company is a major fab tool subsystems player. But in recent times, it has expanded into the solar inverter business.
''Historically, AEIS’ sales were broken into five different groups: semis, solar manufacturing, flat panel, data storage/architectural glass, and service,'' said Mark Bachman, an analyst with Auriga USA LLC, in a report. ''With the expansion of its Solaron inverter line and acquisition of PV Powered, AEIS adds a sixth segment.''
In the solar inverter market, ''AEIS has finally achieved what it set out to do years ago-meaningful diversification away from semis. While the rest of its segments demonstrate clear cyclicality, its new solar inverter business has yet to show any cyclicality apart from seasonal,'' Bachman said.
''We view solar inverters as an opportunity for AEIS to grow earnings to a higher level than its legacy cross-cycle albatross allowed,'' he said. ''Just as things get cooking for AEIS' solar business, concern for its other major business-semis- weighs on investor sentiment. Whether it occurs sooner or later, a semi slowdown cannot be avoided. We expect the semi cycle to rear its ugly head by 4Q '11/1Q '12. We model a slight increase to 2011 semi sales before declining the following year to 2010 levels.''
The company is a new player on the inverter block. ''Our analysis indicates AEIS is an example of a new entrant breaking into a market with newer technology. Its history in semicap manufacturing allowed it to pass higher technology down to its inverter business and achieve the required product features, reliability, and cost per watt metrics to enter the U.S. utility market,'' he said.
''AEIS established itself within the U.S. market by being first on the scene along with Satcon. As the U.S. market is set to grow dramatically in the coming years, we expect AEIS to simply maintain share in the face of major European incumbents also looking to protect industry market share and cost reputation. We believe the real U.S. market share battle lies between SMA and Power-One while SATC loses share going into 2012,'' he added.
In October, Advanced Energy announced financial results for the third quarter ended September 30, 2010. Total sales for the third quarter were $141.0 million, another record for the company, with earnings of $0.40 per diluted share from continuing operations.
The financials exclude results from the Aera mass flow controller business, which was sold to Hitachi Metals Ltd. on Oct. 15, 2010. Results for the quarter include a full quarter of operations from PV Powered Inc.
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