Taiwan: 'Solar Energy Island'?
Dupont and Applied Materials have both made tangible moves suggesting considerable optimism over the prospects for solar energy development in Taiwan. With their support, the next trillion-Taiwan-dollar industry may have already been born.
Taiwan: 'Solar Energy Island'?By Jimmy Hsiung
From CommonWealth Magazine (vol. 401 )
Solar power is taking off around the world.
According to the European Photovoltaic Industry Association global photovoltaic market outlook issued in early 2008, photovoltaic production capacity grew to 2.3 peak gigawatts (GWp) (1 gigawatt = 1 billion watts) in 2007, to bring cumulative installed capacity to 9.1 GWp. Under an optimistic forecasting model, annual capacity installation is expected to grow to 7 GWp in 2010 and 10.9 GWp in 2012, driving cumulative capacity to 44 GWp by the end of that year. The numbers show that compared to the 35-percent growth averaged by the industry over the past 10 years, capacity will grow fivefold in the next five years.
Taiwan cannot afford to distance itself from this trend and should even aspire to become one of its main movers.
A major step in that direction was taken on June 17 in the Gueishan Industrial Park in Taoyuan County, where American chemical giant DuPont celebrated the opening of the DuPont Taiwan Photovoltaic Center, the only one of its kind DuPont has set up anywhere outside Europe.
Establishing the center in Taiwan helped the island take a major step toward becoming the world's "Solar Power Island."
DuPont, Applied Materials Make Their Marks
DuPont plays an important role in the global production of solar cells. Although it only supplies the metallization paste and other materials that account for 4 percent of each solar cell, (75 percent of each cell is crystalline silicon, which the company does not supply), DuPont's influence in the process cannot be underestimated.
Walt Cheng, director of DuPont Electronic Microcircuit Materials Global Business, says this unheralded metallization paste and other materials are the key to increasing the energy conversion efficiency of solar modules.
The DuPont Taiwan Photovoltaic Center can offer customers a base in which to enhance conversion efficiency. Hidden in the facility's elongated laboratory sits an exact replica of a solar cell production line that could one day become the secret weapon responsible for upgrading Taiwan's solar energy sector.
Cheng reveals that Taiwan's top solar cell manufacturers, including Motech Industrial, E-TON Solar Tech and Neo Solar Power Corporation, began lining up long ago for a chance to use the simulated production line. In the future, Cheng says, these manufacturers will bring formulas and processes they've developed to the center for testing, and then armed with the right conditions and settings obtained from the tests, the suppliers can go right into mass production in their own facilities.
"This is just one of the many value-added services we offer," says Cheng, explaining the secret behind DuPont's success. While its materials are more expensive than those sold by its competitors, DuPont's leadership position in the market has never been threatened, because its customers know they're buying not just materials, but also the chemical giant's full range of services and its sustained efforts behind the scenes to upgrade its products.
DuPont's US$3 million development center is not the only major initiative in the sector by an important foreign player. Applied Materials, the biggest vendor of semiconductor production equipment in the United States, also sees considerable potential in Taiwan's solar power industry, with a focus on materials and equipment used to make cost-efficient thin film solar modules.
Following Applied Materials' sale of an 8.5-generation thin film solar module production line to Tatung subsidiary Green Energy Technology last year, the company will set up a next-generation plant to produce CVD (chemical vapor deposition) process systems, used to build critical layers of solar modules or to process glass substrates in the flat panel display industry.
Many foreign companies have "frozen" their investment plans in Taiwan in recent years, but the rise of the solar energy industry has rekindled their confidence in the country, spurred on by the creditable performances of local concerns.
Semiconductor, Flat Panel Firms Jump In
This summer, Taiwan's solar energy sector has been heating up as quickly as the temperatures outside. With the help of Applied Materials technology, Green Energy Technology took orders for 200 MWp (1 megawatt = 1 million watts) worth nearly NT$20 billion at solar energy show Intersolar 2008 in Germany in June. UPS maker Powercom Co. has raised NT$2 billion to invest in solar module production and plans to break ground on its new facility in Yilan County's Lize Industrial Park���at the end of the year. Mobile phone PCB maker Unitech Printed Circuit Board Co., whose chairman Chang Pen-tsao is also the chairman of the General Chamber of Commerce of the Republic of China, ramped up production at the end of June at its solar cell factory in Lize as it prepares to battle with Motech and E-TON for a share of the solar energy market.
According to statistics compiled by the Industrial Technology Research Institute's Photovoltaics Technology Center in May 2008, Taiwanese solar module producers invested at a more rapid pace than their foreign competitors last year. Whether it is in upstream silicon wafers, midstream solar cell production or downstream solar modules and systems, new entries in each field are popping up with growing frequency. According to ITRI, the number of solar energy companies in Taiwan doubled last year to 27, from 13 at the end of 2006. (Table 1)
With new firms entering the field and established companies expanding their facilities, Taiwan's overall solar cell capacity has begun to deliver on its potential. Taiwan's photovoltaic cell output rose 152 percent in 2007 to total NT$53.5 billion and is expected to surge to NT$90 billion this year, according to Photovoltaics Technology Center statistics.
Applied Materials president and CEO Mike Splinter believes that Taiwan, with its strong foundation in the semiconductor and flat panel industries, is ideally positioned to develop solar energy. He stresses that because Taiwan has technical resources and management talent that China lacks, Taiwan can build itself into a strategic Mecca for solar energy.
DuPont's Walt Cheng notes that Taiwan already has the technology needed to make an impact in the industry.
"When people in the IC industry look at the technology used to make silicon wafer cells, it seems to them like going back to kindergarten," Cheng jokes.
Rebecca Tang, president of solar cell producer Mosel Vitelic, agrees. "The technology is already there. What's missing is the know-how and the materials," asserts Tang, who has a background in semiconductors.
Walt Cheng adds that many of Taiwan's flat panel makers plan to take the plunge into solar energy. "Since the technology is ready, not getting involved would be a waste," he observes.
Chi Mei Optoelectronics recently set up a team to develop thin film solar modules, and Tatung subsidiary Chunghwa Picture Tubes has affiliate Green Energy Technology. As for AU Optronics, which is also rumored to be looking at making thin film solar cells, Cheng just smiles mysteriously. This interest has clearly established Taiwan as a solar energy breeding ground. (Table 2)
Government Subsidies Lag
Cheng says DuPont's establishment of a photovoltaic center in Taiwan could not have happened without the strong backing and subsidy policy of the Ministry of Economic Affairs. But he is quick to emphasize that while solar energy industries around the world are all dependent on government subsidies, Taiwan's government lags a long way behind other countries in this area.
A lack of central support can adversely affect the development of the industry, as became evident early this year in Japan, the world's second largest solar energy market. The country's Ministry of Economy, Trade, and Industry abruptly decided to cancel subsidies for solar energy, and soon after the decision was announced, Sharp conceded its status as the world's leading solar energy company to Germany's Q-Cells. The Japanese government has since reversed course to prevent further setbacks and announced recently that it had drafted a budget to resume solar energy subsidies next April, stemming Sharp's losses in equity markets.
Because the solar energy industry requires government support, how to foster fair competition in an unfair environment has become a major issue of debate. China's solar energy industry, for example, has a production value twice that of Taiwan's, even though its technical standards and product quality lag far behind. According to the Photonics Industry & Technology Development Association, China's global solar cell market share in 2006 was 15 percent, more than double Taiwan's 6.7 percent.
Dr. Yi-Jen Chan, the vice president and general director of ITRI's Electronics and Optoelectronics Research Laboratories, believes the production of Taiwan's photovoltaic power industry will grow rapidly within the next five years. But faced with the current reality that three of the 10 biggest solar cell producers in the world are from China and only one, Motech Industrial, is from Taiwan, if there are no government policies to support the industry, the competition for supremacy in the field will be much more arduous for Taiwan than originally expected.
Thus, at the same time as Taiwan's solar cell vendors are busy looking for raw material sources to solve shortages of silicon, the government should be learning from countries like Germany and Japan and devise policies to boost the industry. One idea would be to install solar panels in public housing complexes to generate electricity and then subsidize the purchase of the electricity, which would then encourage others to install solar panels on their rooftops. The domestic market may be relatively small, but such a policy would be a positive and aggressive way to help local solar energy companies promote their products and gain a steady foothold in their home market.
As the cost of solar cells is falling 5 percent a year, solar energy has the potential to become Taiwan's third "trillion-Taiwan-dollar" industry (after semiconductors and video display units). Commercial opportunities in the solar energy field are bound to grow, but they will slip away if industry and government drag their feet. With solar energy showing so much promise, it would be regrettable to let the opportunity get away for good.
Translated from the Chinese by Luke Sabatier
Chinese Version: 台灣迎頭邁向「太陽能島」