Carnage in the solar industry is spreading upstream as companies that make ingots and wafers used in cells and panels announce layoffs and plant closures.
So far, Oregon's manufacturers appear intact, with relatively new factories that are automated and efficient enough to withstand plunging world prices for the solar ingredients. But one closure hits close to home: A spokesman for Sanyo, a Japanese company with a plant in Salem, confirmed Monday that it would shut a California factory that makes solar wafers using older technology.
Producers blame a worldwide glut of silicon ingots and the wafers they're sliced into to make the solar cells that go inside panels. As with cells and panels, much of the oversupply results from increased production in China, analysts say, as well as demand declines from reduced European subsidies for solar power.
The analysts say industry turmoil and continued low prices will at least indirectly affect Sanyo, SolarWorld and other companies with Oregon operations that the state has subsidized to attract. Across the United States, some factories could move to other states, such as Texas and Mississippi, that offer rich incentives, said Fatima Toor, a Lux Research analyst in Boston. She expects more closures, layoffs, mergers and potential bankruptcies.
"There's going to be a lot of blood in the coming couple of years," Toor said. "Whoever survives will do well."
Some companies are going to extraordinary lengths to survive. Germany's SolarWorld Industries America Inc., which employs 1,000 in Hillsboro, continues leading a coalition of U.S. manufacturers seeking tariffs on imported Chinese cells and panels, which they contend are underpriced because of illegal subsidies by Beijing.
Other companies are going down. Peak Sun Silicon Corp., founded near Albany in 2009 to make polysilicon, the material for solar ingots, faces foreclosure after defaulting on a state loan. SpectraWatt, an Intel spinoff founded in Hillsboro in 2008, moved to New York and closed last year. Other bankrupt companies include Evergreen Solar Inc. and Solyndra, the California business notorious for receiving a $535 million federal loan guarantee.
The latest wave of plant closures and layoffs hits factories up the supply chain from cell and panel makers. Last week Sumco Corp., a Japanese silicon wafer maker, said it would cut about 1,300 jobs and stop supplying solar-panel makers. The solar wafer business is expected to incur "a significant loss due to the sharp decline in demand and continued price collapse since last spring," the company said in a statement.
Bekaert, a Belgian maker of wire saws that slice solar wafers, is cutting 1,250 workers. In Germany, Schott Solar is scrapping some wafer production, affecting 290 workers.
Companies that make wafers for the semiconductor industry suffer, too. Germany-based Wacker Chemie's Siltronic division plans to close a plant employing 500 in Japan. The closure could benefit Oregon as some work shifts to Siltronic's Portland plant. That factory, which employs almost 800, will be able to call more workers back from furloughs.
SEH America, which makes wafers in Vancouver for the chip industry, hasn't disclosed whether its ongoing investment in automation will cut workers. Pat McDonnell, SEH site-services senior director, did not return repeated calls for comment.
Sanyo plans to close its solar ingot and wafer factory in Carson, Calif., laying off about 140 workers. The plant makes an outdated 104-millimeter-square wafer and would be expensive to remodel, said Aaron Fowles, a spokesman for Sanyo North America Corp. The company, which makes high-end panels known for longevity and high energy output, must become more cost-competitive with companies from China and other countries, he said.
In contrast, Sanyo's Salem plant, which employs more than 200, makes the newer 125-millimeter-square wafers. The wafers are shipped to Japan, where they are made into cells that are installed in panels at plants in Japan, Hungary and Mexico, Fowles said. Salem workers, he said, "are producing the kind of product that we need and want and that have demand in the market still."
Sanyo, which is part of Panasonic, is building a $580 million plant in Malaysia that will make wafers, cells and panels.
Jigar Shah, who heads a U.S. industry coalition opposing SolarWorld's trade action, predicts that Malaysia and other countries will boost exports to the United States if tariffs are imposed on Chinese cells and panels. He said the U.S. government should boost support of solar manufacturing instead of resorting to tariffs.
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