April 4, 2007
Sun still melts down Valley’s silicon
Is Silicon Valley’s silicon shortage about to slacken?
An annual whinge-fest, for suppliers and customers for the scarce polysilicon raw material that powers the chip and solar panel industries, actually contained some good news this week.
The Solar Silicon Conference in Munich heard plans from established suppliers and new entrants to add substantial additional capacity. While 40,000 metric tonnes of polysilicon were produced in 2006, this figure is expected to treble to 120,000 in 2010.
Hemlock, the leading producer, said it would double its own capacity between 2010 and 2012, although it went on to say it had already pre-sold this extra capacity.
That gives you some idea of the demand for polysilicon, particularly from the solar panel industry. Semiconductor makers have had stable long-term fixed-price contracts. Their needs for their ever-smaller chips are more modest than the new kids on the chip blocks responsible for the fast growing acreage of solar panels.
Merrill Lynch, in a report on silicon wafer provider MEMC, says solar-cell makers are adding capacity at a faster rate than facilities for the raw material are being added.
It says new entrants will probably struggle to produce polysilicon on time and within budget and predicts a tight market for years to come.
