Update on silicon shortages [RE-wrenches]

Joel Davidson joeldavidson at earthlink.net
Wed Jul 27 09:04:56 PDT 2005


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Peter,
I will contact you off-list. The good news is wrenches and others involved
in PV can keep doing what we are doing to meet market demand and "pull" PV
modules and upstream materials through the supply chain. The best way to
get more PV modules is to order them and keep ordering them. Manufacturers
are showing orders to investors to get the money to build more production.
More production means greater throughput and increased competition which
will get us back on track for lower prices. It all takes time. 20 years
from now, people will look back on the birth pains of the PV industry - in
their PV powered homes and workplaces.
Joel Davidson

Original Message:
-----------------
From: Peter Duchon info at asappower.com
Date: Tue, 26 Jul 2005 21:36:10 -0700
To: RE-wrenches at topica.com
Subject: RE: Update on silicon shortages [RE-wrenches]


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Thanks Joel, I understand your point better.  The only point I try to make
is phrased as a Socratic question usually.  What if there was a virtually
unlimited resource that would allow for a transition-from-fossil-fuel period
of time, say 30-60 years with accelerated electricity consumption, to take
care of growing chip fabbers, PV manufacturers, old and new to come, making
distributed generation power system installations becoming normal (in
addition to and not off- the grid power nipple/infrastructure), and just to
round it out, take care of the communications industries and the recovering
optical fibre manufacturers so they could rewire the world with fibre,
saving all that copper for our PV system wire/cable needs?   Whew!  Sorry.
Trying to get a lot in there.  You always get me going, Joel!  Doesn't
matter the topic!

But please, again, contact me off list if you'd like to hear more about the
"plan."  Before Michael writes me the poison pen!  Typically, the "plan"
involves a single business plan, numerous custom private placement
memorandums, scores of non-circumvent/non-disclosure agreements, 100's if
not 1000's of individuals, and last but not least, a spiritual alliance.
Thanks again for listening.  That's all I'm saying on this list.

Thanks for listening,
Peter



-----Original Message-----
From: Joel Davidson [mailto:joeldavidson at earthlink.net]
Sent: Tuesday, July 26, 2005 7:15 PM
To: RE-wrenches at topica.com
Subject: Re: Update on silicon shortages [RE-wrenches]


PV is a very small industry competing with very big players for limited
silicon resources.

By value added I mean turn a silicon wafer into a PV cell and it's worth
about $10. Turn the same wafer into hundreds of integrated circuits and it's
worth more. The wafers to chips adds more value than wafers to even high
value, cost competitive off-grid PV.

There is a lot of public information about PV factory and factory expansion
investments. See:
http://archive.greenpeace.org/pressreleases/climate/2000mar14.html
http://www-tec.open.ac.uk/eeru/natta/renewonline/rol26/12.htm
http://www.bp.com.au/news_information/press_releases/previous/2002/pr_solar_
syd.asp
http://www.rweschottsolar.com/en/files/media/2003/8/6319628861651562500jqt1t
riorpufc55ibnywwus.pdf
http://www.ameinfo.com/43366.html
http://boston.bizjournals.com/boston/stories/2005/06/27/daily12.html
http://www.rednova.com/news/space/18070/world8217s_largest_solar_factory_ope
ns_in_japan/
http://www.solarbuzz.com/news/NewsNAMA52.htm
...and so on.

What's your plan?


----- Original Message -----
From: "Peter Duchon" <info at asappower.com>
To: <RE-wrenches at topica.com>
Sent: Tuesday, July 26, 2005 4:20 PM
Subject: RE: Update on silicon shortages [RE-wrenches]


To answer your question:  Whoever controls the spice!  That is, whoever gets
in on the ground floor...  We're going to revolutionize the semiconductor
fab industry too.  In terms of cost control anyway.  There will be some
mighty giants falling in our wake, but they will fall quietly, peacefully,
willingly, and most likely, profitably.  Indeed, the PV industry stands to
gain the most from the investment needed to make a significant cost
reduction of its major component.  Respectfully, I disagree with your first
line Joel.  I can't think of anything against PV, especially when it comes
to value-added factors of solar power being as competive as NG power plants
vs. computer chip manufacturer purchasing control of the spice.  That won't
happen as long as I'm involved.  I do understand your point however -- money
talks, bs walks, or perhaps it just sits there in a big pile of itself, like
money can do also...when it's not being used for some good investment that
makes sense for everyone.

Also, I believe we can do PV manu. plants for about $15M for 5mW annually.
Where did you get the $100M number?

Thanks for listening,
Peter Duchon
info at asappower.com

-----Original Message-----
From: Joel Davidson [mailto:joeldavidson at earthlink.net]
Sent: Tuesday, July 26, 2005 10:30 AM
To: RE-wrenches at topica.com
Subject: RE: Update on silicon shortages [RE-wrenches]


The value-added scale is against PV because PV uses a lot of silicon
compared to computer chips. The PV industry is going to have to spend the
same big bucks as the chip industry. A $100 million PV factory is a big
deal. Today, Intel announced another $1.3 billion investment for another
chip fab. Guess who gets 13X the silicon 13X faster?

Original Message:
-----------------
From: Peter Duchon info at asappower.com
Date: Tue, 26 Jul 2005 09:27:41 -0700
To: RE-wrenches at topica.com
Subject: RE: Update on silicon shortages [RE-wrenches]


Hi Joel, Wrenches,
One of our big industrial strength investors was at the SemiCon the prior
week, as noted in the article below.  While that gentleman's group is
putting in mucho dinero, among other industry "players", there's still a way
to join the 60+ shareholders, whom have invested from $1000 to $60,000
amounts.  Regular RE-Wrench list readers will recall my long-winded
dissertation on the shortages experienced by the PV industry in late January
of this year.  In that message I had proposed an offering of sorts, a "way
out" of the situation.  Look at me as holding a big solar powered light at
the end of a tunnel that was dug through a mountain of pure silica with my
own and many others' bare hands.  It's that easy to "dig."  We will be
changing the world of PV and the energy industry at large by early 2007.
It's relatively cheap AND easy, as far as world-changing goes.  We just have
to do it.  It's like washing the dishes, or seperating the trash for the
recycling bins...the toughest part is thinking about it.  So I am doing my
part.  I was made CEO and Chairman of the group responsible in March of this
year.  If anyone is even slightly interested in what I talked about back in
January, do yourself a favor, consider yourself a capitalist for good, and
please contact me off-list via email.

Peter Duchon
info at asappower.com

-----Original Message-----
From: Joel Davidson [mailto:joeldavidson at earthlink.net]
Sent: Monday, July 25, 2005 7:25 PM
To: RE-wrenches at topica.com
Subject: Re: Update on silicon shortages [RE-wrenches]


Allan is right about it being serious. Polysilicon production is a capital
and energy intensive commodity industry like smelting steel only
significantly higher purity is required. Capitalists don't want to buy into
expensive low-profit commodity businesses so prices will keep climbing until
it hits the fabricators' "build yer own factory" price point. A little
downstream, semiconductor manufacturers like Intel build poly-to-wafer fabs
at over $1 billion a pop as needed and get all the raw poly they can buy. Of
course, they get a lot more for their processed wafers than PV companies.
Changing the world is not cheap or easy.

----- Original Message -----
From: "Allan Sindelar" <allan at positiveenergysolar.com>
To: "New wrenches posting" <RE-wrenches at topica.com>
Sent: Monday, July 25, 2005 3:50 PM
Subject: Fw: Update on silicon shortages [RE-wrenches]

MessageFolks, it's real and it's serious.
Allan at Positive Energy
SEMATECH Council Seeking Ways to Forestall Looming Polysilicon Shortage
Wednesday July 20, 3:00 pm ET

SAN FRANCISCO, CA--(MARKET WIRE)--Jul 20, 2005 -- Responding to rapidly
rising demand for polysilicon from the booming photovoltaic market, the
SEMATECH-led Critical Materials Council (CMC) will investigate strategies to
help improve the short-term supply of polysilicon for the semiconductor
industry.



The CMC's response grew out of a meeting last week at SEMICON West, in which
polysilicon producers described operating at maximum capacity, and predicted
shortfalls of semiconductor-quality polysilicon starting this year and
extending into 2008. The CMC meeting was sponsored by SEMATECH and SEMI.

"Basically, everyone is running everything they have" to keep up with
silicon demand, said Dave Keck, vice president of Advanced Silicon
Materials, LLC. While the chip industry currently consumes about two-thirds
of manufactured silicon, photovolotaics takes one-third and its appetite is
growing about 30 percent a year.

"There is not enough polysilicon to support the growth of the photovoltaic
industry after 2008," much less the increased needs of the semiconductor
industry as it converts to 300 mm wafers, Keck said. He and other meeting
participants predicted a polysilicon shortage of 4,000 metric tons this
year, increasing to 6,000, 12,000 and 20,000 metric tons over the three
years following.

Gary Homan, marketing vice president at Hemlock Semiconductor Corp., said
the silicon industry's options for dealing with the oncoming crunch include
incremental expansion of existing facilities; building new plants;
identifying new materials for customer use; and forming consortia to tackle
the issue on a unified basis.

"There is a lot of activity going on in the industry to try to address the
polysilicon shortage, but there's still a lot of work ahead," Homan said.
"We are probably underestimating the polysilicon demand" from 300 mm wafer
conversion, he added, in which case "there are people who will not get
supplied [with polysilicon] in the future." He also indicated during
subsequent meeting discussions that the supply chain that supports
polysilicon production is also facing capacity challenges.

The world's ravenous demand for silicon was quantified by Dan Tracy, Senior
Director Industry Research & Statistics at SEMI, who estimated that
producers will turn out 26,000 metric tons of polysilicon this year and
29,000 metric tons in 2006. "There is strong demand out there for
polysilicon" just from the semiconductor industry, which could have forty
300 mm fabs in production around the world by 2006, he said.

Neil Gayle, a SEMATECH manager and CMC coordinator, said it's crucial for
SEMATECH member companies -- which represent about half the world's
semiconductor production -- to have access to remedies for a polysilicon
shortage that some are already calling inevitable. He said the CMC, which
provides a forum for SEMATECH members to assess the semiconductor supply
chain and help assure a robust supplier base, is a natural vehicle for
seeking such solutions.

"We'll investigate the possibilities for expanding the supply of
polysilicon, and work with suppliers and manufacturers to try to develop a
coordinated response," Gayle said. "Even if a polysilicon shortage is
unavoidable, we may be able to find ways to soften the impact on our member
companies and the industry."

SEMATECH is the world's catalyst for accelerating the commercialization of
technology innovations into manufacturing solutions. By setting global
direction, creating opportunities for flexible collaboration, and conducting
strategic R&D, SEMATECH delivers significant leverage to our semiconductor
and emerging technology partners. In short, we are accelerating the next
technology revolution. For more information, please visit the SEMATECH
website at www.sematech.org. AMRC, Advanced Materials Research Center, ATDF,
the ATDF logo, ISMI and International SEMATECH Manufacturing Initiative are
servicemarks of SEMATECH, Inc.

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