Solar-power fever may not last says firm
Tokyo, November 5, 2007
The world's current fever for solar power may not be sustainable and could be a bubble, an executive at Japanese silicon maker Tokuyama Corp said.
Tokuyama, the world's No. 2 maker of polycrystalline silicon after US firm Hemlock Semiconductor Corp, is still gauging long-term demand for silicon used in solar cells, managing director Yukio Muranaga told Reuters in an interview.
"Demand for solar power will grow, but we really don't know by how much," Muranaga said. "It's too early to commit to more investment at this stage."
The global solar market, which some of Tokuyama's clients expect will grow by as much as 40 percent a year, depends on uncertain factors including how much governments such as Germany's are willing to subsidise solar energy use, Muranaga said.
Investors have criticised Tokuyama for falling behind in a capacity race against its rivals, who are betting that demand for clean energy and semiconductors in zippy gadgets will boost demand for polysilicon.
Polysilicon prices are now 15 percent to 20 percent higher than a year ago.
Hemlock, nearly two-thirds owned by Dow Corning Corp, plans to more than triple annual capacity by 2010 to 36,000 tonnes of polysilicon, while Germany's Wacker plans to more than double capacity to 14,500 tonnes.
That would mean the two companies would outpace Tokuyama, which plans to raise annual capacity by 60 per cent to 8,200 tonnes in the spring of 2009.
Until then, Tokuyama's sales of silicon, are capped by capacity, even while prices of raw materials such as coal surge, limiting growth.
The company, which forecasts 0.8 percent growth in operating profit this year, sometimes has to turn down orders for 500 or 1,000 tonnes, said Muranaga.
But Tokuyama, which supplies silicon to wafer makers such as SUMCO Techxiv Corp, is not about to rush into expansion.
Unlike Kyocera Corp or Sharp Corp, which are expanding solar cell production after spending decades developing solar technology, recent entrants don't understand how variable the market can be, Muranaga said.
Burned when the IT bubble burst in 2000, the company still remembers having to halt production at its newly built plant as polysilicon prices fell by half.
"That's a trauma that is going to make them very, very cautious," said Yoshihisa Toyosaki, president of IT consulting firm J-Star Global Inc.
The company is now concentrating on developing a new production process that would slash costs and allow it to undercut its rivals in solar-use silicon, if successful.
The vapor-to-liquid deposition (VLD) process could take "a few years" before it is ready for commercial use, but that's no cause for concern, Muranaga said.
"We are looking five years, 10 years ahead," he said, saying governments are likely to need to balance their environmental policies. "Solar cells require charcoal, which comes from trees. Producing too many solar cells means deforestation, and that just defeats the purpose of green energy." - Reuters
More Miscellaneous Stories
- Death penalty sought for Bahrain terrorists
- Girl, 9, dies after fall from 8th floor in Abu Dhabi
- Lebanese café brand opens Dubai outlet
- Bahrain poultry firm told to step up safety
- Customer dies in Bahrain cafe brawl
- Bahraini boys hurt while planting bombs
- Philips, Ericsson launch LED street lighting
- DuBiotech to set up first Halal safety lab
- Jotun to supply coatings for Makkah Station
- Raytheon wins $655m Kuwait Patriot deal
- Alwaleed Foundation lights up 3 Saudi villages
- Poultry farms strike may trigger shortages in Bahrain
- Oman seals Victoria food security pact
- Saudi woman, 80, donates $133m to charity
- New Saudi clamp on energy drinks
- Outrage follows Bahrain killer bomb
- Improvised explosive device used in Bahrain attack
- 3 policemen killed in Bahrain blast
- Dammam-Al Ahsa train service starts
- Egypt wheat supplies enough to last until June
- Expat killed at Saudi workers' holding facility
- 80 global speakers for Doha summit on family
- Restaurant runs up $47,555 phone bill in 4 days
- NZ minister to visit Gulf states
- Public-private tie-ups ‘vital for agri growth’
- China firm wins solar power project in Amman
- 15,000 attend Bahrain garden show
- Omani firms shine at top food expo
- Bahrain to set up national food company
- Dozens hurt in gas leak at plant near Doha