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Photovoltaics set to power Emcore turnaround

After recording a big loss in 2007, an analyst sees profitability for Emcore at the end of 2008 while extra solar business from South Korea adds weight to his prediction.

Despite more than doubling quarterly revenue from its photovoltaic products over the same period in 2006, Emcore turned a loss of $15.3 million on sales of $47 million for its final fiscal quarter of 2007, ended on September 30.

For the full year, the company made a loss of $57.3 million on expectation-exceeding sales of $170.1 million.

Revenue from the sales of multi-junction cells has accelerated to bring Emcore $59.7 million revenues in 2007, in comparison to $38.7 million for the in fiscal 2006.

John Lau, an investment analyst at Jefferies and Co., says this trend will turn the company's quarterly loss into a profit by the end of next year.

His judgment is, in part, based on his checks on Emcore's demands for the germanium wafers and other raw materials used in its triple-junction GaAs solar cells "“ a technology that he believes has great potential.

“GaAs concentrated photovoltaic (CPV) technology has a long term migration path to lower cost than traditional silicon implementations,” Lau writes.

Lau predicts Emcore will post total sales of $224 million in its fiscal 2008. The company itself has projected its 2008 revenues at $210-230 million, and suggests that this will be revised upwards.

A dramatic increase in Emcore's order backlog, gaining more than $100 million in the past year to reach $149 million, must factor heavily in these predictions.

That backlog is now even larger, thanks to an order for CPV cells from South Korea that came alongside the chip-maker s financial results.

The deal is an order for 5.7 MW of CPV systems, with a potential follow-on order for another 14.3 MW.

The follow-on systems are likely to come through a tie-up between Emcore and DI Semicon, a South Korean semiconductor packaging company that will make CPV systems. DI Semicon has apparently also committed to a minimum annual purchase of 15 MW of Emcore's CPV systems.

“This order marks an important milestone in the acceptance of CPV technology and product solutions as the lowest cost-per-watt of any utility scale power system,” said Earl Fuller, who leads Emcore's solar power division.

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