MUNICH, Germany — Ailing DRAM manufacturer Qimonda AG (Munich, Germany) is entering the solar cell business. In a joint venture with solar system integrator Centrosolar group (Munich, Germany), the company plans to build a new fab in Portugal.
The joint venture will produce silicon-based solar cells. It will be owned 51 percent by Qimonda subsidiary Qimonda Solar GmbH and 49 percent by Centrosolar. With an investment of €70 million (about $109 million), the JV will build a wafer processing fab in Vila do Conde (Portugal). The fab will be located near Porto where Qimonda already runs a backend facility.
Both companies aim at achieving better conditions on the silicon market through the bundling of their buying power, spokespersons explained. However, neither side explained how this can be achieved in the basically separated markets for solar silicon and photovoltaics material. "Silicon is silicon," a Qimonda spokesperson said, pointing out that the company has signed a long-term supply contract with China-based LDK Solar Co. He declined to comment on the ongoing market shortage for solar silicon.
More importantly than the combination of their acquisition power, however, are other synergies. "Qimonda has significant experience in mass manufacturing of high-quality silicon", a Centrosolar spokesperson explained. On the other side, Qimonda hopes to benefit from Centrosolar's marketing-know how. The company describes itself as application-centered with strong expertise in system integration as well as sales and distribution. "We are not an integrated solar energy manufacturer but more a kind of downstream company," the Centrosolar spokesperson said.
From Qimonda's perspective, the move allows the company to tap an additional market without much financial and R&D effort. 50 of the 70 million Euros to be invested into the JV will be taken as a loan at the capital market; the remainder will be shared by the parent companies proportionally to their holdings. This leaves only between €10 and €15 million for Qimonda, a spokesperson explained.
And there is another important motive for the company that currently suffers badly from the volatility in its core business: "The PV market is much steadier than the DRAM market", the spokesperson said. The PV business won't be part of Qimonda's core business but it will generate a nice extra income, he said. Already for 2010, the joint venture targets sales of about €200 million per year.
It is possible that Qimonda's step is about to mark a beginning trend: Sources close to the memory chip manufacturer hinted that other semiconductor companies are mulling similar business moves.
