Monday, April 18, 2005

Silicon Shortage Threatens Solar Cells

Although in the big picture this is probably a small glitch, it still seems important.
Silicon for solar cells price tracking oil price? Maybe there is an oil industry conspiracy.
Investment idea? Who is making the money off the raw polysilicon?

MUNICH (Reuters) - Top solar power executives voiced fears on Wednesday that their industry's stellar growth over the past few years might stall due to a global shortage of polysilicon, the main component of solar cells.

Takashi Tomita of Japan's Sharp, the world's biggest solar-cell maker, warned of what he called a "vicious spiral" in which the market could grind to a halt as rocketing silicon prices meant suppliers could not afford to meet demand.
"I am very worried about it, because a shortage of polysilicon materials would lead to an increase in prices of polysilicon and could ultimately lead to a stagnation of the solar-cell market, said Tomita, chief of solar systems at Sharp.

But prices for solar-grade silicon, which have leapt from around $9 per kilo in 2000 to $25 last year and $60 this month, are threatening to put the brakes on the annual growth rates of 30 to 40 percent the industry has seen since 1997.

Silicon makes up most of the earth's crust, but it is very expensive to purify into forms such as polysilicon that are used in the high-tech industry.

Unlike in 2000 when solar-cell firms could snap up cheap surplus polysilicon no longer required by semiconductor makers after the high-tech bubble burst, the solar industry now has to compete with a healthy electronics sector.

And chipmakers can more easily afford higher prices, because silicon is a far smaller component of chips than of solar cells.

Polysilicon producers, meanwhile, are developing means of making cheaper, solar-grade silicon especially for solar cells, which need not be as pure as that used for semiconductors, but volume production is some years off.

...materials -- largely polysilicon -- account for 80 percent of the production costs of solar cells.

Silicon Shortage Threatens Solar Cells


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