PHOTON International The Photovoltaic Magazine

REC's plans for a 75-percent stake in silicon producer ASiMI won't help PV this year

Norway's Renewable Energy Corp. (REC) has its sights on a controlling interest in ASiMI's electronics-grade polycrystalline factory in Montana – with plans to shift to production for solar applications. While potentially a good addition to the REC/ASiMI joint venture, Solar Grade Silicon, don't expect a dramatic increase in the supply for PV right away – long-term contracts for the semiconductor industry will still rule the day.

	© photon.pictures.com
Empire-maker?: REC president Alf Bjorseth (right), inspecting silicon ingot production in Glomfjord, Norway, hopes to soon do the same at the ASiMI polysilicon manufacturing plant in Montana, where REC wants to buy up to a 75-percent share.

It sounded too good to be true. And maybe it was. As PHOTON International gets ready to host its 2^nd Solar Silicon Conference on Apr. 11 in Munich, Norway's Renewable Energy Corporation AS (REC) looked like it was dressing up to become the darling of the many expected symposium attendees from the global PV industry. Why? Because on Feb. 10, REC, one of the world's largest manufacturers of polysilicon and parent company of Norwegian PV wafer manufacturer ScanWafer AS, announced it was working up a deal that could raise total polysilicon production capacity from around 2,300 tons to over 5,000 tons. It had signed a letter of intent (LOI) with Komatsu Ltd. to purchase a 75-percent interest in the Japanese company's polysilicon and silane gas subsidiary, Advanced Silicon Materials LLC (ASiMI), based in Montana. This understanding, says an REC press release, should lead to »definite agreements« in April, most likely followed by an acquisition by the end of June. In addition to increasing REC's 70-percent stake in Moses Lake, Washington State-based Solar Grade Silicon (SGS), in which ASiMI is the minority owner and trades its off-spec silicon from the electronics industry, the deal appeared to offer an immediate boost to endangered supplies for a solar-grade silicon-starved PV industry – the plan, says REC, is to »gradually« shift ASiMI's polycrystalline silicon business from electronic to PV applications.

But there's the adverbial rub. The fact is that if and when the deal is finally done, the REC acquisition won't do much to lift PV out of the doldrums right away. The reason is that the Butte, Montana facility, which has a polysilicon production capacity of around 2,600 tons that is being increased to around 3,000 tons by the end of the year, would still be obligated to honor long-term supply agreements to a pair of Komatsu semiconductor subsidiaries, electronics-wafer manufacturer Komatsu Electronic Metals Co. Ltd. (KEM), and Taiwan-based Komatsu Silicon Corporation. Alf Bjorseth, president of REC, declines to give many details since REC and Komatsu are currently checking each other out in due diligence. »But we clearly don't have expectations that there will be huge volumes for the solar industry in 2005,« he says. And his forecast for 2006 is vague, only calling the amount »significant.« In other words, the amount Komatsu needs is probably not so large, and according to sources several clients from the electronics industry receiving product from ASiMI became concerned once the LOI was made public.

Bjorseth also doesn't give any numbers for how much the Komatsu deal would cost. But clearly the current high price for silicon will jack up the sales price. So why buy now? »This was a window of opportunity,« he says. »A good time for Komatsu and for us because we need the material right now.«

Silane-gas production down the road

Another reason is silane gas. ASiMI is the world's largest producer of silane, with a combined annual capacity of 8,000 metric tons, including around 2,300 ton capacity at SGS and about 5,600 tons at the ASiMI plant in Montana. The acquisition would give REC the rights and know-how to set up silane factories on green fields anywhere where cheap electricity could lower production costs. »We are evaluating the expansion possibilities either in Moses Lake or other green-field plants,« says Bjorseth. But, he warns, it could take anywhere from two to three years to get a combined silane and polysilicon plant up and running.

So how does he see solar-grade silicon production for 2005 and beyond? Unlike Ewald Schindlbeck, head of German-based Wacker's polysilicon division, the world's second-largest producer of polysilicon, who foresees a 25-percent production decrease in 2005 (see PI 11/2004, p. 80), Bjorseth thinks there is enough feedstock available to maintain present activity in the PV industry. Our contributing author, financial analyst Michael Rogol, on the other hand, expects the availability to increase by 40 percent to 17,000 tons for the year (see PI 1/2005, p. 36). Bjorseth doesn't. »We don't see where the additional 4,000 metric tons are located today,« he says. »And we talk to a lot of customers.«

For this year at least, it certainly won't be coming from the Butte facility. And next year? Perhaps REC will unveil more at the 2^nd Solar Silicon Conference – at least if the »definite agreements« scheduled for April are hammered out by then.