‘India and China to be largest consumers of photo-voltaic cells in next few years’

‘India and China to be largest consumers of photo-voltaic cells in next few years’

Santa Clara, California-based Applied Materials Inc. which supplies manufacturing equipment and services used in the global semiconductor and photo-voltaic cell industry, recently teamed up with computer disc maker Moser Baer India Ltd to set up a thin film solar fabrication facility here. Mike Splinter, president and chief executive officer of Applied Materials, which reported $9.1 billion (Rs35,745 crore) in revenues in 2006, spoke to Mint on India’s semiconductor policy, the market for solar photo voltaic cells in, and the role of India in the company’s global business. Edited excerpts:

India’s semiconductor policy has come through encouraging chip makers through incentives to invest and set up fabs here? What do you think of it?

I was much more positive several years ago about establishing a fab (short for semiconductor fabrication facility) here in India. The policy is good and overcomes a lot of the hurdles so hopefully this will allow something to happen in India. But we have to realise that the semiconductor industry is in large scale consolidation and all the major foundry companies such as Sony, are moving to a more fab-like foundry model and already have established manufacturing plants in Singapore, Taiwan, China and Japan. The question is do they need to expand beyond that to service the entire world? The big question for India, however, is that does it need any wafer fabs here to serve the local market? I believe that’s why the policy was made, to encourage people to come here and establish fans and serve the local market. I am hopeful about fabs being established in India, but I am still waiting to see one Indian entrepreneur drive that to conclusion and make it happen.

In March this year, you entered into a technology partnership with Moser Baer to set up a solar photo voltaic facility in India by early next year...

Thin film solar photo-voltaic cells are the best way to reduce energy costs and are the cleanest form of generating electricity. India and China are going to be the largest consumers of photo-voltaics in the next few years as they have the most electricity. It is worthwhile for industry and government to pursue developing those technologies to drive down the cost of making these. Part of the solar photo voltaic problem is that there isn’t any scale and occupies less than 1% of the total energy landscape. Secondly, people’s thinking about how to use solar energy has to evolve.

How would you define a good (photo voltaic) policy and which countries are ideal examples?

A good policy to develop these technologies is one that offer incentives that help equalize the cost (with conventional energy) in the short term. But, it should have a sunset on it and it should be a declining incentive over that period of time. Germany and the European Union are pushing for renewable energy in a really strong way.

Given the way demand is growing and policies in different countries, do you see converging of costs of solar generated power versus conventional means?

Yes, of course but that will take another five to ten years. There is still too much technology that has to be developed and deployed in volume. In short term, the demand is high, so even though cost may come down, the pricing will remain high. That’s what we have seen in the last 24 months. There is close to $350 billion spend every year on energy and electricity generation. Even if we can capture 1% of that over the next few years, it will be a gigantic win. We have just started our solar business and in our first year we will have over $600 million in contracts.

What kind of other work are you doing in India?

In India, we have over 1,000 people, including those with contractors, in Bangalore and Chennai. We do extended engineering design, mechanical design and modelling of our equipment and processes in Bangalore. In Chennai, we have our own software products and have over 100 software developers there. I would like to see an LCD manufacturing factory in India.

The idea is to have integrated teams around the world so that we can have design done 24 hours (a day). In terms of people, we have more a presence in India than other regions of the Asia Pacific. Globally, we have 15,000 people.