Solaicx isn't your garden-variety silicon wafer maker. The Santa Clara, Calif. company says it has devised a manufacturing process that allows it to churn out extremely efficient monocrystalline wafers tailored for the solar market at a viciously competitive low price -- the holy grail of photovoltaics.
This opportunity to steeply reduce its manufacturing costs looked too good to pass up for MEMC, one of the biggest makers of silicon wafers in the world, which has seen its core business erode since the economic downturn hit the semiconductor industry hard. Today, it announced its acquisition of Solaicx for $76 million. Branching into solar -- a business analysts say is poised to boom -- could help breathe new life into the company.
At least that's the logic, despite falling silicon prices that have taken a bit of a shine off the deal -- and might be one explanation for Soliacx's relatively low acquisition price (as Greentech Media also notes). That said, silicon-based solar prices remain high enough to prevent photovoltaic panels from becoming cost competitive with fossil fuel sources, at least for now.
That's why so many companies like NanoSolar and First Solar are pursuing thin-film solutions that limit the amount of silicon needed to generate electricity. Others, like SolFocus are working on concentrating solar solutions that use mirrors to saturate smaller silicon cells with light to cut down on the overall amount of silicon needed. And still others like BrightSource Energy and eSolar are eliminating silicon from the equation altogether by building utility-scale solar thermal arrays that use mirrors to heat water and turn steam turbines.
Obviously, there's still a lot of well-funded movement away from reliance on silicon, which could still experience the same price fluctuations that led it to be so expensive in the past. So the buy should still boost MEMC's growing solar portfolio.
The wafer giant has been on a bit of an acquisition spree, with solar as a prime focus. Late last year, it brought solar plant developer SunEdison into its fold for $200 million, as well as solar finance firm Tioga Energy. The deals contributed to a first quarter loss for MEMC, which said it saw its overhead more than double despite high sales traffic.
Solaicx shareholders will receive $66 million in cash upfront, with another $10 million in cash folloing closely behind. If the company hits designated milestones, they will get up to $27.6 million more. The deal is expected to close by the end of next month.
Previously, Solaicx took about $50 million in venture funding from backers including Firsthand Capital Management, Labrador Ventures, Applied Ventures, Greenhouse Capital Partners, D.E. Shaw, and Big Sky Ventures.