SAN JOSE, Calif. — The machine looks like a square spaceship with a round hatch or a giant oven with a convection fan. Its designer jokingly calls the contraption the “world’s most expensive bug zapper.”
In fact it’s a wafer tool, developed by San Jose startup Twin Creeks Technologies as a better, cheaper way to make solar cells.
Given the collapse in solar panel ASPs over the past year or so, reducing solar cell manufacturing costs is critical to competitiveness. It isn’t clear whether Western manufacturers can still compete with their Chinese rivals, which are believed to have leveraged ample government funding to shore up their business as they slashed prices and grabbed market share.
But Twin Creeks is betting there’s still a business in making the machines that make solar cells. By adding value in the manufacturing process, company executives claim, the third-generation Hyperion wafer tool could put the United States back in the solar business, or at least one segment of it.
Siva Sivaram, Twin Creeks’ voluble CEO, knows a lot about electronics manufacturing. A 14-year veteran of Intel, where he oversaw the chip giant’s external manufacturing, Sivaram literally wrote the book on chemical vapor deposition; his 1995 text is still used in college engineering courses. Sivaram eventually joined his idol, Intel co-founder Robert Noyce, at the Sematech chip manufacturing consortium. While there, Sivaram worked on another key chip manufacturing technology, chemical-mechanical planarization.
After stints at Matrix Semiconductor (acquired by SanDisk in 2006) and on the board of Nanosolar, Sivaram founded Twin Creeks in 2008. The company kept a low profile until last month, when it introduced its third-generation Hyperion tool, the production version of its solar cell manufacturing technology. The machines are being made in Senatobia, Miss., under terms of an economic development deal with the Magnolia State.
The arrangement keeps the manufacturing technology—and at least a few jobs—in the United States, Sivaram said in an interview. “The know-how stays in the U.S.,” he said.
The Hyperion 3 wafer production system developed by Twin Creeks Technologies
The problem with current solar manufacturing, Sivaram said, is that “something comes in, something goes out, with no value” added. The company concluded that much thinner wafers could halve the cost of making solar cells. It applied the principles behind a technology called proton-induced exfoliation to develop the Hyperion tool. The technique slices wafers to produce efficient, flexible solar cells as thin as 20 microns.
“You remove the waste, you make the material more productive, you add more value in your factory instead of just taking [solar] materials and selling it for a few cents more,” Sivaram said in pitching his product. “The value here is in the ability to make those thin” wafers.
The Hyperion 3 can process more than 1.5 million thin wafers annually, or about 6 megawatts’ worth of solar cells. Given the competitive nature of the solar business, Sivaram said, Twin Creeks is already at work on a next-generation tool capable of producing 8 MW per year. “We need to keep improving,” the CEO said.
Twin Creeks claims to have lined up five “qualified customers” in China since the production version of the Hyperion tool was released.
This is a problem that affects more than unskilled labor. Value is relative. Something is worth what someone else is willing to exchange for it, and this applies to the worker's labor as well as physical goods. An assortment of workers in a variety of industries have effectively been told "What you do isn't worth what you are getting paid to do it", as ways are found to do those things cheaper.
The CEO of Delphi Automotive sent shock waves through the auto industry in 2005 by filing for Chapter 11 bankruptcy. No surprise: Delphi had workers making up to $60/hour in salary and fringes and was attempting to compete with foreign suppliers with labor costs of $10/hour. The automakers who bought the parts Delphi made were trying to reduce costs and putting enormous pressure on suppliers to lower their prices. Delphi had the choice of declaring bankruptcy, closing plants, and shedding workers to rationalize costs, or going out of business entirely. The unionized auto workers laboring at Delphi plants had priced themselves out of the market. They may have gotten other jobs, but they are unlikely to have gotten jobs paying what they used to make, because no one was willing to pay that much for what they did.
And those folks were probably classed as skilled laborers, so things are much worse for those who truly have no skills at all. We probably have a fairly large number of folks now who just won't *get* jobs, because they can't do anything anyone is willing to pay for, and more who are looking at pay cuts because the value of their skills has declined.
We need significant improvement in education to reduce the number of truely unskilled laborers. And we need to create a culture where continual learning is assumed. The job you are doing today may not exist tomorrow, and the skills you applied may be irrelevant.
The days of unskilled workers making $30 an hour are likely over. The question to me is can we get those who don't have any job to take one at a lower pay scale and can we get Production to the point that we can take a person with a High School education and pay them a fair (not inflated price) to do a job, with the aid of automation where possible to produce a solar (or any other product for that matter) than Americans are willing to pay for. I think Americans are willing to pay a little more to buy American, but not a lot more. Shipping costs must be going up. That will not erase lower China wages (or Chinese Government subsides either), but if it helps to close the gap and if some American Workers are willing to work for the right price we may have a solution. If not, we are doomed.
Let's define what we mean by the "US solar industry". That encompasses a lot more than just the fabs turning out the photovoltaic wafers, and the vast majority of jobs will be in things like sales and installation. What the solar industry really needs isn't photovoltaic wafers made here: it's for the cost of using photovoltaics to decline further relative to other ways to generate power, so that going solar is a more economically attractive proposition for Those who might do it.
I was involved in a federally funded alternative energy push in the 70's when OPEC was in first flower, and gasoline was going over $1/gallon. We were certainly *aware* of solar cells, but most alternative energy source got little pick-up because using oil, even at higher prices, was still *cheaper* than the alternatives.
In that sense, photovoltaic wafer manufacturing in China is arguably *good* for the US solar industry as a while, because it reduces costs and makes solar energy generation more competitive with alternatives.
Precisely. Consider manufacturing still done here and related services. The auto industry still has US plants turning out cars. It's overall faster, cheaper, and more flexible to assemble finished vehicles here than to build them elsewhere and ship them here. The UAW has been forced to accept changes in the sorts of deals they could once offer workers because the industry can't afford them, but the plants remain.
Meanwhile, once those cars are sold, someone has to maintain them. A friend was talking about the two year automotive program at the high school she attended, where the first week, the student picked a car at a junkyard, and spent the rest of the program learning how to rebuild it from scratch: engine, transmission, brakes, electrical system, body work, upholstery, painting - everything. At the end of the course, the kids who passed had running cars they had restored. Local dealerships salivated over the graduates.
If I were advising a kid on a possible career these days, auto mechanics might be an option I'd suggest. Dealerships are all looking for skilled mechanics, there's good money, and by definition, the job *can't* be outsourced. It has to be done here. And those mechanics in the "services" sector may make rather more than the guy on the line at the assembly plant.
Yes, nearly so, but not necessarily in the same way. The obvious way to decrease manufacturing costs is to replace workers with more advanced automation. If those advanced automation tools are produced in the US, and few workers are needed, then what advantage is there to moving US operations to China?
Proton cutting, This is same as Soitec "smart-cut" process.Japanese silicon supplier Shin Etsu Handotai was the first company to license "smart-cut" process from Soitec.
how does Twin Creeks solve the IP conflicts with Soitec?
They might be. The sort of gear Twin Creeks is selling is high end capital goods, with a very hefty price tag per unit. How big is the total market for such equipment? The Chinese might very well be able to duplicate it. Would it be worth the time and expense needed to do it?
From a purely economic standpoint, it might not. There might be political reasons why they might choose to that had little to do with economics.