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Terrestrial Demand Drives Emcore's Solar Ramp

With potential orders for terrestrial solar power systems worth more than $300 million in the pipeline, Emcore is adding two production MOCVD systems at its Albuquerque facility.

Solar cell and fiber-optic component maker Emcore is adding significantly to its chip manufacturing capacity to meet increasing demand for terrestrial solar power systems featuring high-performance compound semiconductors.

During an investor conference call to discuss its recent financial performance, company CEO Reuben Richards said that two more production MOCVD systems would be added at Emcore s chip fab in Albuquerque, New Mexico, this year.

Back-end wafer processing equipment including evaporators and photolithography systems to make the GaAs/GaInP/Ge cells will also be purchased in a capacity expansion estimated to cost $6 million-$7 million.

Richards and Emcore president Hong Hou explained why the extra equipment was needed when they detailed the extent of future orders for solar systems.

Emcore has three key design wins that, collectively, could be worth over $300 million. Those include a three-year contract with World Water and Power, a company in which Emcore owns a considerable stake (see related story), valued at $100 million.

In 2007, the first year of that supply agreement, Emcore will deliver cells capable of producing 1.5 MW, followed by 10 MW in 2008 and 15 MW in 2009. The cost of those concentrator solar systems is estimated at between $4 and $5 per Watt - considerably less than the cost of a comparable system featuring silicon cells.

Emcore also has a contract with a Spanish energy supplier that is valued at more than $100 million over the next five years.

More recently, it has struck a deal with a customer in Asia. Although this third contract is at a very early phase and will be worth only $1.5 million to Emcore this year, Richards said that it could become a long-term deal worth in excess of $100 million.

With an annual solar cell capacity of only 50 MW using the five production MOCVD systems already in place at Albuquerque currently, the magnitude of these contracts clearly make it necessary for Emcore to increase its solar cell output.

Emcore also makes solar cells for satellite applications, and has just won a high-profile contract to supply NASA s Jet Propulsion Laboratory (JPL) with solar panels for JPL s Mars Cruise Stage spacecraft.

The spacecraft will carry the Mars Science Laboratory rover to the red planet, in a mission that is expected to launch in late 2009.

The release of Emcore s latest financial results were significantly delayed because of an investigation into stock option awards that also cost the company $1.9 million in the quarter that ended on December 31, 2006.

The company posted total sales of $38.5 million in that quarter, although this came at a net loss of $12.2 million - partly due to the costly stock options review and also the development of a prototype solar concentrator system.

In the quarter that ended on March 31, for which Emcore has not yet published complete details, the company expects to post sales of approximately $40 million.

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