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Emcore confident despite solar curveball

Doubts over cell customer Green and Gold Energy hit Emcore's solar business, but with plenty more customers in the pipeline CEO Hong Hou aims for an initial public offering in 2009.

III-V solar cell manufacturer Emcore has cancelled all production slots relating to its supply agreement with controversial customer Green and Gold Energy (GGE), after the Australian company revealed that it was negotiating the sale of its business.

In a call to discuss the US firm s latest financial results, Emcore CEO Hong Hou said that GGE would make no more purchases under the previously agreed $79 million supply deal.

"We want to wipe the slate clean," said Hou, even though the company in talks to buy GGE s assets has indicated that it intends to negotiate a new supply contract for concentrating photovoltaics (CPV) components.

Concerns over the credibility of GGE and its ability to fulfil any multi-million dollar contracts surfaced earlier this year (see related story), prompting Emcore to issue a statement refuting negative claims about GGE circulated in an internet blog as "seriously misleading".

That came just a few weeks after GGE placed a follow-on order valued at $39 million.

Although Hou did not say how much of the $79 million contract had been honored, he did say that products shipped to GGE to date had been paid for.

But even with GGE wiped from Emcore s books, Hou says that demand for its CPV components and cells is mounting up, ahead of a crucial six months in the development of the technology.

Pilot projects
"Emcore will be the first to benefit from the ramp of the CPV business," Hou said, adding that Emcore is currently working on pilot projects in Spain, Portugal, the United Arab Emirates, Canada, the US, Korea and Australia.

Those pilot installations will be closely monitored and, if the CPV technology is deemed viable, a major production ramp should follow.

Hou said that Emcore s management team recently embarked on a tour of customers planned CPV sites "“ including GGE s in Australia "“ to better understand the development of the new technology.

One Spanish installation using Emcore components is "in the process of connecting to the grid", while the Emcore system featuring in the important ISFOC test-bed, also in Spain, should be hooked up at the end of November.

On the development front, Emcore is working on the third generation of its own CPV system, where the focus is on reducing the cost-per-Watt generated figure to what would be a highly competitive $1.75.

Emcore s engineers are also making progress with the inverted metamorphic (IMM) cells developed in conjunction with the US National Renewable Energy Laboratory (NREL). Now said to be capable of conversion efficiencies between 42 and 45 per cent at high solar concentrations, the technology is set to go into production for both space and terrestrial solar applications in 2009.

Solar spin-off
Despite the current uncertainties in the solar business that prevented him from giving any formal guidance for future CPV revenues, Hou said that Emcore is on track with plans to spin off the solar side of its business as a separate entity.

"We continue to sign long-term agreements with a wider base of customers, and are on schedule for an initial public offering in mid-2009," said the CEO.

• Overall, Emcore reported a sharp increase in revenue to $75.5 million for its third fiscal quarter, ended on June 30.

Boosted by the recent acquisition of Intel s optical platform division, sales of fiber-optic components accounted for $53.6 million of that total, with photovoltaics sales registering a $5.1 million year-on-year increase to $21.9 million.

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