Posts Tagged ‘Merlin’

by Matt Margolis

I’ve been asked by a few people what is going on inside GT’s San Jose office?  As it turns San Jose is currently the location that is designing and building the Merlin pilot line along with the building of high volume production machines.  According to a few employee profiles on Linkedin, GT has been on designing and building the Merlin pilot since late 2013.  GT indicated in March that the company planned to have the Merlin Pilot line operational and engage early customers in the 2H’13 and commercially ready by 2015.

I have no update against GT’s expected date but it does look the Merlin operation is up and running.

 

 

GT Merlin Jobs Located in San Jose, CA

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March 2014 Technology Presentation

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Full Disclosure: I am long GTAT and I hope Merlin is magical as it seems

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by Matt Margolis

GT mentioned during the Q4 2013 prepared remarks that their Merlin technology, “comes out a research operation we established in the Bay Area, over a year ago, to focus on advancing the state of the art in the design and assembly of solar cells and modules”.  GT referred to a “research operation,” which immediately set off my alarm that the Merlin product was not inside a San Francisco PV module warehouse but a state-of-the-art R&D facility located in the Bay Area that focuses on PV module performance and durability.  GT does not have a R&D facility or even an office in the Bay Area, which only leaves one option; a research lab that is run by a PV module maker.  GT typically goes after strategic deals with the best and the biggest companies in their target market (Sapphire – Apple), so it only makes sense that GT would reach out and try to work with one of the top 3 or 4 PV module makers.  According to Solarbuzz 2013 rankings the top 3 PV module makers were

  1. Yingli Green Energy
  2. JA Solar
  3. Trina Solar

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If I was to develop a game changing technology with a PV module maker I would not only want to the biggest fish but I would want someone I trust.  Someone that I have worked with years!  As it turns out Yingli Green Energy not only was ranked #1 for producing solar cells but their relationship with GT Advanced Technologies (formerly GT Solar) goes back to 2002, when Yingli became GT’s first customer in China.  Also, if you look at the various orders placed over time by Yingli the press releases contain language that translates to “hey scratch my back and I’ll scratch your back.”  If you don’t believe me, read these comments between GT and Yingli’s within this order announcement from 2010 to that is focused on celebrating GT Solar’s 1000th DSS450 Crystalline Ingot Growth Furnace shipment as well as the very close relationship between the companies.

GT Solar International, Inc. (NASDAQ: SOLR), a leading global provider of polysilicon production technology, crystalline ingot growth systems and related PV manufacturing services for the solar industry, today announced that it has achieved the milestone shipment of its 1,000th DSS450TM crystalline ingot growth furnace. The recipient of the system is long-time Chinese customer Yingli Green Energy Holding Company Limited.

 

“GT Solar is a trusted and valued partner for Yingli,” said Mr. Liansheng Miao, chairman and chief executive officer of Yingli Green Energy. “Their ingot growth furnaces consistently produce high quality material which helps to reinforce our company’s reputation for delivering reliable products to our customers.”

 

“We are pleased that Yingli continues to express confidence in our ingot growth technology,” said Tom Gutierrez, president and chief executive officer of GT Solar.

 

Yingli Green Energy became GT Solar’s first customer in China in 2002 when they set up the first ingot, wafer and cell production lines at their Baoding headquarters. These production lines launched Yingli into the PV manufacturing industry and today they are one of the world’s leading fully vertically integrated PV manufacturers. Yingli has continued to invest in GT Solar’s multicrystalline ingot growth furnaces including the DSS240, which was introduced in 2003, and the current DSS450, which was introduced in 2007. Today, GT Solar has shipped over 1300 crystalline growth furnaces to customers around the world.

It’s very clear that Yingli and GT have a mutually beneficial relationship and both have admiration and appreciation of the benefits that have resulted from their long partnership.  GT has enabled Yingli to continue to be a leader in the PV module space while Yingli’s investment in GT equipment has allowed GT to expand their business and invest money in their R&D to support the next generation of equipment that will benefit Yingli even more.

Yingli announced on July 12, 2011 that they were opening up a R&D facility in the San Francisco Bay Area for comprehensive product testing and evaluation.  Furthermore, the announcement indicates that the new research and development lab will accelerate our understanding of module performance and reliability. Additionally, R&D facility lab will allow them to evaluate new technologies and deliver next generation products.

Yingli Americas also announces the opening of a new research and development facility in South San Francisco for comprehensive product testing and evaluation.

“Our new research and development lab will accelerate our understanding of module performance and reliability,” said Brian Grenko, Director of Operations for Yingli Americas. “This investment will enable us to more quickly evaluate new technologies, deliver next generation products, and better serve our customers throughout all stages of a project’s life cycle.”

“We now have the ability to offer product testing and development support within the U.S. for our customers here,” added Mr. Petrina. “We plan to use this new facility to proactively address market opportunities and trends to better support our pre- and post-sales efforts – a sign of our continued dedication to technical leadership.”

 

 

Image from Yingli

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Image from Yingli

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Additional Images of Yingli’s PVTL obtained from Greentechmedia

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Yingli is very interested in reducing the cost of PV modules evidenced by their strategic agreement with Dupont that was signed in February 2012 for $100 million.  Yingli reupped on the contract and extended it another year for an additional $100m last June.  Under the terms of the terms of the agreement, Yingli China will purchase materials including DuPont™ Solamet® photovoltaic metallization pastes that help boost the power output of solar cells and DuPont™ Tedlar® polyvinyl fluoride film that has been proven to protect solar panels even in the harshest environmental conditions.  I have some bad news to report for Dupont, the silver paste sales to Yingli may shrink up to 80% from the previous levels.

PV expert Mark Osborne, from PVTech summarizes this one very simply, “GT Advanced Technologies has launched a c-Si solar cell metallisation and interconnect technology that it claims will boost conversion efficiencies while lowering production costs via significantly reduced silver paste consumption”.  In another article about Merlin, Osborne points out that “GTAT ‘Merlin’ metallisation and interconnect technology reduces silver paste needs by 80%“.  It appears that one of the biggest losers from Merlin’s entry into the PV module world will be Dupont, who will likely see most, if not all of their $100 million materials contract centered on silver paste evaporate and shift over to GTAT before the summer is up.

GT mentioned that Merlin came out of a research operation that was established over a year ago.  I was able to retrieve a copy of GTAT’s Investing in Continued Growth and Diversification presentation, that was discussed in August 2012 during Canaccord Genuity Growth Conference.  What is interesting on this presentation is that GTAT actually spills the beans that they “are considering opportunities to move downstream solar equipment market to support next generation solar cell and module manufacturing.”  As it turns out it took GT less than 2 years to mention an opportunity and to bring it to the market.  This is exactly the same broadcasting GT has been doing over the last 2 years with sapphire cover screens.  It will come as no surprise to the long-term GT followers when Apple releases sapphire cover screens across their upcoming iPhone 6 line-up.  When GT’s management says they are confident and all that is left is execution, the message is clear,  they are going to get it done!  Merlin technology is “discussed”  in the second bullet point on the image below from the August 2012 conference presentation.

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If you are wondering what else GT brought up during the August 2012 conference especially relating to sapphire cover screens, please see the image is below.  BTW does Apple make LCD TV’s?

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Conclusion

Clearly GT’s Merlin PV module technology fits like a “T” within Yingli’s PV Testing Lab’s primary focus area and the facility is located in the Bay Area and it was established more than a year ago.   The contract announcement in 2010 between GT Solar (renamed to GT Advanced Technologies) clearly exhibits the GT co-dependencies, trust as well as a high level of engagement between both companies.   Additionally, Yingli has been ranked near the top of the PV Solar Cell Producing charts for the last several years and they are well positioned in the solar industry to keep growing the top line and improve their bottom line with the help of GT’s Merlin Technology.  I don’t know about you but I think Yingli was the “secret” partner that helped GT perfect the Merlin technology and I fully expect Yingli to be the first customer of GT’s Merlin Technology.  Furthermore, I’m expecting Yingli and GTAT to once again celebrate their long tenured relationship and continued partnership within Merlin’s inaugural order announcement before the end of this summer.

Full Disclosure: I am long GTAT and have no plans to buy or sell anything holdings in the next 72 hours

Analyst Reaction to 3/14/14 Technology Conference

Goldman Reiterates Buy Rating:  GTAT affirmed its EPS goal of over $1.50 by 2016, though Goldman sees the estimate is conservative given the $4 to $5 billion market opportunity that awaits before factoring in its Apple.   GTAT could see large upside from Hyperion.  The analyst doesn’t see sapphire lamina being included in the upcoming Apple iPhone 6.

UBS Ups PT to $22: UBS sees GTAT new product sales offsetting some sales exposure to Apple, which will be a long-term positive for the company. HiCZ furnaces making mono-crystalline solar wafers (estimate $1bn market by 2017).We estimate equipment gross margin to be in a range of 35-40% and materials gross margin to be in 25-30% range. We expect Hyperion for sapphire and Merlin for solar to be the most meaningful contributors to GT’s sales in 2016 with initial orders expected in 2H14 UBS concluded.

Canaccord Reiterates $21 PT: “We reiterate our buy rating on GTAT shares as we believe the Apple opportunity plus the recovery in the solar market should allow the company to exceed Street expectations,” Canaccord analysts Jonathan Dorsheimer and Josh Baribeau wrote in a Monday research note. “Additionally, GT has an increasing number of ‘irons in the fire,’ which reduces diversification and customer concentration risks.”

Credit Suisse Ups PT to $26: Takes 14’/15’16’ EPS estimates from $0.13/$1.38/$2.12 to $0.14/$1.49/$3.00.  Takes 14’/15’16’ Revenue estimates from $717m/1,559m/2,123m to $728m/$1,643m/$2,747m.  “the other businesses in polysilicon equipment, ingot equipment, sapphire equipment, and new products like Hyperion for thin laminates and Merlin for cell grids deserve more credit in the valuation and will likely lead to higher consensus estimates, especially as orders resurge in late 2014 and early 2015”.

Obscure Analyst Ups Target: $75-100: “2015 and 2016 estimates have not changed significantly from what I had before the 3/14 Technology Conference.  My margin has improved based on comments from TG regarding Hyperion and that it would carry “superior margins” to GT’s historic rates because no one else has a product like it in the marketplace.

Updated Revenue & EPS: 2015 $3.177 B – $2.84 EPS, 2016 $4.736 – $5.26 EPS

Previous Revenue & EPS: 2015 $3.177B – $2.74 EPS and 2016 $4.416B – $4.26 EPS.

Apple Upgrade Cycle Making News
 
Forbes: Is reporting that the “Mother lode” of Apple upgrade cycles is coming in 2014.  Citing ISI analyst Brian Marshall is predicting Apple will release 2 phones 4.7″ and a 5.5″ model.
 
We estimate the current iPhone installed base to be about 260mil users (roughly equivalent to the last 7 quarters worth of iPhone units). By our calculations, we estimate slightly over half of iPhone sales today go to upgrades (with the majority of new users coming from international markets). However, we believe that while the upgrade rate (i.e., % of installed base upgrading their device in a given quarter) had hovered in the 10-11% range over 2011-12, it has now dropped closer to 9% as users find few compelling reasons to upgrade. In peak quarters, the upgrade rate has reached the ~12-14% range and we expect a similar upgrade rate in 2H14 for iPhone 6, if not better. We believe this could drive ~$3.00 (or ~10-15%) EPS accretion over 2H14 assuming an incremental ~3% of the base upgrades each quarter.
GT’s Magical Merlin Technology
Mark Osborne (PV Tech): Covers GTAT’s Merlin Technology, the game changing addition to the solar market.
“We are very excited about the progress we are making in developing what we believe will be a true game-changing technology to lower the cost of solar modules,” said Tom Gutierrez, GT’s president and CEO. “Our Merlin technology uses mature, proven manufacturing processes to produce the flexible grids and we are confident that we can scale grid production to meet the requirements of the solar industry. Our Merlin technology is expected to fundamentally change the way modules will be manufactured, shipped and installed in the future.”
 
TG on CNBC with the Fast Money TeamOf course the first question was about Apple from the Fast Money team was about Apple.  TG went right into answering it by focusing on the creation of US jobs and the fact it is a sapphire manufacturing facility under a 1.4m square feet under roof.  TG indicated that GT has received 2 of 4 prepayments so far from Apple and things are going well.  When asked about it will be up and running to full capacity, TG stated, “As you can imagine in that industry surprise is a very important element in introducing products.”  TG also stated, that “the unique nature of what we are doing for Apple, we are the probably only ones in the world who can pull this off”.  He also said GT is not just about Apple, We introduced products (on Friday) that should drive 3-5b of incremental market opportunity over the next 3 to 5 years that are all equipment products”. 
 

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GT’s Merlin Technology evolved from GT Equipment Technologies’ Patent US 6620645 B2 titled: Masking and connected bus bars on solar cells.
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The abstract and (Images):
A method for fabricating multi-cell solar devices using thermal spray deposition techniques to spray metal powder directly on solar cells and on the backing upon which solar cells are assembled, to form collection grid lines, bus bars, electrodes and interconnections between solar cells.

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The Invention:

The invention relates to the application of bus bars for interconnecting solar cells, and in particular to thermal spray depositing of bus bars across the grid line surfaces and the back surfaces of solar cells to form interconnections for a sequence of solar cells to make a solar panel.

The Issue with today’s Process

In the prior art process, the tabbing machine is very complex, combining mechanical parts that move and cut tabs and electrical parts that heat up the cell surface and solder the tabs. Moreover, for the soldering of tabs on the back side, an extra step is required for screen-printing the silver pads. This adds to the cost of machines and working space, as well as to production time and costs, since extra machines for printing and baking are necessary.

Summary of Benefits

Enables interconnection of cells to be completed in less time and at a lower cost than current methods

  • Allows connections directly to a single- or poly-crystalline silicon solar cell and of interconnections between cells.
  • Enable the interconnection of solar cells by a single apparatus instead of multiple-step, tabbing and stringing equipment as is currently practiced (no more equipment!)

Higher electrical and mechanical quality and improved solar/electric conversion efficiencies

Sprayed metal particles have high velocity and temperature, the coating made by these particles has strong bonding with the substrate materials.The thermal spray system is the only apparatus needed for the whole process.

  • Replaces machines for mechanical handling and electrical soldering of tabs
  • Replaces an extra screen-printing machine and a baking oven for the silver pads
  • Reduces the required investment in processing equipment.

No restriction to the metal that can be used if it is available in the form of a fine powder suitable for spray techniques.

  • Silver, copper, aluminum, nickel, gold or any of their alloys are good candidates and more
  • Suitable thermal spray methods include any form of the commercially available spray deposition techniques, such as arc plasma spray, flame spray, HVOF, and laser spray.

Conclusion:

This technology does sound “magical,” one spray bottle can replace equipment, soldering,  printing and baking equipment.  The technology will reduce weight, reduce costs and take a bite out of the metallization paste providers top and bottom lines (DuPont, Heraus, and Giga Solar Materials).  The thermal spray can utilize any any fine metal powder so the application being showcased today might be for solar, but it could be broadly applied to the electronic devices and minimize the need for soldering all together.  Merlin, reminds me of Willy Wonka’s patented three-course dinner inside of a little piece of gum, because one little bottle of thermal spray certainly packs a heavy punch!

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~Obscure Analyst 3/13/14

Full Disclosure: I am long GTAT and have no plans to buy or sell in the next 72 hours

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