Coherent’s Finlay Colville examines cell makers’ decisions to expand capacity or retrofit production lines through turn-key vs. custom-built line, and how this evolution offers different levels of opportunity and engagement for the PV equipment supply chain.
by Finlay Colville, Coherent Inc.
February 17, 2010 – To every tool builder in the PV equipment supply chain, heed that time-held adage: “The customer is always right!” In this case the customer is the cell/panel manufacturer, and they are right regardless of several decisions they make: c-Si or thin-film, low cost or high efficiency, small or large panel, glass or flexible substrate. Accordingly, equipment suppliers dutifully fall into place. But perhaps the decision that most impacts on the equipment supply chain is whether cell makers choose to purchase a complete turn-key production line or to configure tooling in-house in a customized manner. So, let’s look at how and why this evolved, and what the implications are for tool suppliers today.
First, a definition of turn-key and custom-built production lines is needed. For clarification, the discussion focuses on lines configured for c-Si cell manufacturing (wafer to PV cell, not cell to module) and for thin-film, the step from (typically) glass panel to thin-film PV cell/module. Turn-key lines provide PV producers not just a guaranteed efficiency, yield, and capacity specification: they allow close strategic alignment with the preferred tool supplier. This “partnership” can include assistance in factory design, installation, training, and (more recently) active participation to assist the PV producer to reach profitability in line operation. Custom-built production lines are characterized by strong ownership of cell makers in tool selection for individualized (and more flexible) process flows, and the ability to safeguard their competitive edge through patented process steps based upon unique IP portfolios.
Since 2000 the number of turn-key production line suppliers to PV has grown considerably, from just a few line suppliers (originally at the MW-level for a:Si thin-film) to over twenty with line capacities from 6MW to nearly 100MW. For the record, the split today goes something like this: c-Si (6), a:Si/mc-Si (10), CIS/CIGS (3), CdTe (2). There is nothing particularly surprising here. Ten years ago, worldwide PV production was barely 300MW, there were only three manufacturers with >50MW installed capacity, and therefore little incentive for leading tool suppliers to make significant investment into high-throughput PV lines. Moreover, cell producers then were characterized by strong in-house technical know-how and innovation, and typically enjoyed full ownership over equipment and process flows, or had inherited lines via acquisition during the 1990’s. But an even greater hindrance to tool builders lay in the technologies being pursued then. Ten years ago, there was actually a broader distribution in the technologies being produced compared to the relative polarization in approaches indicative of recent top-10 2009 production tables.
The inflection point for turn-key lines was 2006. Installed capacity worldwide exceeded 3GW, and strong double-digit compound annual growth rates were being forecast. The economic case was made. By this time, a handful of tool suppliers had emerged with key equipment being installed at incredibly fast rates — e.g. diffusion furnaces, PECVD tools, screen-printers, and laser scribers. Capacity expansion was all the rage, and turn-key lines were offering a low-risk market entry route using equipment already qualified by a range of established end-users. Initially for turn-key lines, the supplier acted more as a “general contractor” for the delivery of an entire assembly line. Installations were equipped with as much tooling produced in-house, supplemented by partners offering complementary tooling either at the front- or back-end. The success of this approach was instant and wide-reaching within the industry. Gradually thereafter, by internal product development or strategic acquisition, turn-key players increased the percentage of in-house tooling (and revenues available) from their line offerings. And with this, their influence and success snowballed during 2008 as PV capacity expansion plans exploded worldwide.
Customer profiles began to emerge also for turn-key or custom-built lines. Hotspot clusters developed geographically, especially for c-Si lines — starting with Taiwan, followed by Korea and then India, marking these countries’ respective entries as cell production powerhouses. For both c-Si and thin-film turn-key lines, the target audience was almost exclusively new entrants to PV; companies wishing to bypass the difficult cell making learning curve and achieve volume production with the lowest risk possible.
|Estimated percentage split in annual PV production output, comparing turn-key and custom-built production lines.|
The figure above captures growth trends from 2005, comparing specifically production output from turn-key against custom-built lines. Clearly, the percentage of production from turn-key is increasing annually — but the graph somewhat hides the potential impact of lines delivered in the past 18 months awaiting prime-time deployment. While turn-key growth to date has been effected mainly by c-Si lines, the next push will almost certainly come from thin-film turn-key lines. Notwithstanding any new line purchases, commercial capacity of turn-key a:Si lines could reach a staggering 2GW by 2012. It is surely just a matter of time before a:Si/mc-Si production (re)joins c-Si (both the low-cost and high-efficiency tracks) and CdTe as the dominant technology segments tracked within the industry.
Finally, moving down the equipment supply chain, opportunities exist today for equipment suppliers regardless of the initial decision on turn-key or in-house custom-build. These fall under several categories. At first glance, there is tool supply to either the turn-key players (component supply) or to cell makers directly (turn-key tool supply at specific process steps). However, a third option has emerged, stimulated by trends toward high-efficiency cells — upgrading (or retrofitting) existing lines (either original turn-key or in-house standard cell lines) with new process tools to increase efficiencies by between 0.5% and 2% at the cell level.
Regardless, then, of trends or decisions, the customer always being right does seem to work, with a wide range of options available down through the entire PV equipment supply chain. Only from time to time (or quarter-end to quarter-end), individual supplier perceptions of this may vary considerably!
Finlay Colville is director of solar marketing at Coherent Inc., Santa-Clara, CA, USA. E-mail: firstname.lastname@example.org. Web: www.Coherent.com/Solar. Phone: +44-7802 238-775.