Posts Tagged ‘Yingli Green Energy’

by Matt Margolis

I reached to for GTAT for comment and the company representative declined to discuss who GT works with on its technology development programs.

Background

GT Advanced Technologies (GTAT) mentioned during the Q4 2013 prepared remarks that its Merlin technology, “comes out of 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 Merlin product was not tested inside a Bay Area PV module warehouse, but instead it came out a R&D facility located in the Bay Area. GT does not have a R&D facility or even an office inside the Bay Area, which only leaves one option; a research lab that is run by a leading PV module maker.

Merlin the Magnificent

Merlin is GT’s solution to improving the downstream solar equipment marketplace. The Merlin PV module offers a drastic improvement over current PV modules in 5 key areas; total system cost, solar cell efficiency, weight, flexibility and durability. GT’s Merlin technology is expected to deliver a total cost reductions of over 10% and cut silver paste use by up to 80%. The drop in silver paste usage as a result of Merlin’s patented design results in a lighter PV module, which may explain Merlin’s improved flexibility over other PV module designs. Additionally, Merlin demonstrated the ability to improve solar cell efficiency by 0.7% as well as significantly improving overall module durability. A solar cell efficiency gain of 0.7% doesn’t sound like much but when most solar cells are hovering around 17% it represents a 4% improvement. GT’s Merlin PV module technology is “agnostic,” and will improve the efficiency of any type of solar cell. GT also informed investors that Merlin would not be sold exclusively to any one potential customer, which opens the door for all PV module makers to enjoy GT’s game changing technology. Images below were taken from GT’s March Technology briefing.

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GT’s Long Term Relationship with Yingli

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 (YGE) not only was ranked #1 in 2013 for producing PV modules, 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), 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 companies 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 its business and invest money in its R&D to support the next generation of equipment that will benefit Yingli even more.

GT typically goes after strategic deals with the best and the biggest companies in their target market (i.e. Apple for sapphire), so it only makes sense that GT would reach out and try to work with one of the top 3 PV module makers in the world. According to Solarbuzz 2013 rankings the top 3 PV module makers were

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

So far I have focused on GT’s Q4 prepared remarks that indicated GT’s patented Merlin technology came out of a research operation in the Bay Area over a year ago. Secondly, I dug into GT’s closest and longest relationship with a PV module maker by the name of Yingli, that was consummated in 2002. Lastly, I provided 2013 Solarbuzz rankings of the top 10 PV module makers and focused on the top 3, which included Yingli. The only item that is missing to connect the dots is a R&D facility that is run by a leading PV module maker inside the Bay Area. As it turns out, Yingli opened up a Bay Area R&D facility in 2011 with the primary focus of accelerating their understanding of module performance and reliability. Yingli’s R&D facility located in the Bay Area is the perfect facility for GT to battle test its Merlin technology and truly understand how Merlin stacks up against the competition.

Yingli Opens up a Bay Area R&D Facility in 2011

Yingli announced on July 12, 2011 that the company was 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 the company’s understanding of module performance and reliability. Additionally, R&D facility lab will allow Yingli 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

Additional Images of Yingli’s PVTL obtained from Greentechmedia

Conclusion

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 (image below). GT’s 2012 presentation clearly indicates its intentions of heading downstream and venturing into Module Manufacturing. The August 2012 presentation states GT is, “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 introduce Merlin as an opportunity and then bring it to the market. GT’s module manufacturing opportunity, which officially was introduced as “Merlin” technology, is referenced in the second bullet point in the image below.

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I’ve established clear evidence that GT’s Merlin PV module technology fits like a “T” within the primary scope of Yingli’s Bay Area PV Testing Lab’s that was established over 2 years ago in 2011. The contract announcement in 2010 between GT Solar (renamed to GT Advanced Technologies) clearly exhibits the 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 module supplier charts for the last several years. I believe Yingli is the “unnamed” collaborative resource, that helped GT battle test and monitor the results of GT’s game-changing Merlin technology within their Bay Area research operation, that opened its doors in 2011.

According to the market research firm IHS, Yingli claimed the #1 spot again in 2013 as the biggest PV module supplier, increasing the company’s market share from 7.4% (2012) to 8.3% in 2013. Solarbuzz reported that the top 2 PV module suppliers (Yingli and Trina Solar (TSL) accounted for 15% of PV module shipments in Q4 2013. Trina Solar is also long term customer of GT and has placed over $70m of solar equipment orders with GT since 2008. Trina Solar placed a $49m Polysilicon reactor order in 2008 and a DSS equipment order totaling $24m in 2010.

GT indicated that Merlin could generate $1B a year in annual sales based on a 20% market adoption rate by 2018. Yingli and Trina Solar have a combined PV module market share of 15% as of Q4 2013. GT likely “battle tested” Merlin at Yingli’s R&D facility in the San Francisco Bay Area and Trina Solar has been a long time GT solar equipment customer since 2008 or earlier.  GT is well positioned to sell Merlin to the top 2 PV module suppliers in the world and drive Merlin’s market adoption rate above 15% and generate over $800m of annual revenue from with just two customers much sooner than previously expected.

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GT’s CEO Tom Gutierrez indicated during the March technology briefing that, “we don’t build the trap and wait for the mice, we work directly with the customer to find out what they want”. I just hope GT has enough cheese to feed all the mice that will come crawling through the door for a bite of GT’s Merlin technology. Furthermore, it wouldn’t surprise me in the least, if Yingli and GTAT celebrate their long tenured relationship and continued partnership within Merlin’s inaugural order announcement in the 2H of 2014.

 

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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