Schmid Silicon Technology: Polysilicon Update

Silicon strategy covers the gamut of quartz and metallurgical silicon to polysilicon.

There has been a dearth of news regarding Schmid Silicon Technology (SST) since the Sunways AG enters polysilicon production business announcement and my Schmid Silicon Technology: From East Germany with Polysilicon post.

At PHOTON’s 6^th Solar Silicon Conference on April 1, 2008, part of the Photovoltaic Technology Show 2008 Europe, Gebr. Schmid GmbH + Co. (Deutsch) representatives, Frank Tinnefeld and Jochem Hahn, presented “From sand to module – a fully vertical integrated approach for the PV Industry.”

Schmid has observed the Euro price of silicon metal has increased almost fifty percent since 2005. As a result, Schmid has formed a joint venture in Kazakhstan, Schmid Silicon Kazakhstan, to mine quartz (SiO₂), not sand, and to build and operate a metallurgical silicon (mg-Si) production facility. In the first phase, Schmid plans (“investments will be explored”) to invest about USD $150 Million to construct a facility with 30,000 metric tons per year of mg-Si production capacity:

• 10,000 metric tons per year of mg-Si will be processed by Schmid Silicon Technology into 6,000 metric tons per year of Polysilicon
• 20,000 metric tons per year of mg-Si will be sold on the world market

Having secured land and mining rights at a location northeast of Taraz, Kazakhstan, construction of the mg-Si facility will start in July 2008, and silicon metal production is slated to start in the second half of 2009.

Schmid believes they have developed a new way to produce polysilicon using the UMOSI process:

single step catalytic disproportion of chlor silane mixture to monosilane and pyrolysis of monosilane:
4 HSiCl₃ = 3 SiCl₄ + SiH₄; SiH₄ = Si + 2 H₂
Optimized total process structure in respect to:
Hydrochlorination, Hydration, Disproportion and Pyrolysis

SST claims the UMOSI process produces polysilicon with a cumulative cost structure 28% cheaper than the Siemens process. SST has partnered with Spectrum for “Monosilan Technology and Process Know-How” forming a joint venture called (I presume) Schmid Silicon Ukraine (SSU). And yet another joint venture, Schmid Silicon Engineering (SSE) has been formed with an unnamed EPC (engineering, procurement and construction) firm for engineering and chemical plant construction.

SST plans to construct pilot production, TCS (Trichlorosilane, HSiCl₃), and 6,000 metric ton (6 x 1000 metric tons) production facilities at the Schwarze Pumpe Industrial Park (Industriepark) located between Spremberg and Spreewitz, Germany. Per the SST schedule, the first 2,000 metric ton production facility will begin construction in the third quarter of 2008 and be commissioned in the fourth quarter of 2009.

SST is still looking for additional investors in the 6,000 metric ton polysilicon fab (Silicon Fab “Schwarze Pumpe”) project in 1,000 metric ton modular clusters. SST touts silicon independence, scalability, cost savings at 6,000 metric ton scale, a 3 to 5 year return on investment (ROI), and “highly innovative technology and equipment with high potential for future development” as key investment drivers.

To date, Sunways AG (FRA:SWW) has been the only investor named in the SST project. In the Sunways investor Presentation Feb. 2008 on slide 19, Sunways notes Schmid is responsible for the “construction, installation and utilities operation of a turnkey plant for the production of 1,000 tons solar silicon as of 2010”. This arrangement appears to be a corollary to the Foundry/Fabless joint venture business models that evolved in the semiconductor industry. Will Schmid Silicon Technology operate these turnkey polysilicon plants for their customers or expect them to take the keys and drive as with Schmid’s turnkey production equipment solutions for solar wafers, cells, and modules? I believe many solar companies will find a “Fabless” polysilicon business model with guaranteed capacity at industry competitive costs attractive.

And in 1366 Technologies Wins Solar Startup Competition, Ucilia Wang at Greentech Media reports that GreenVolts CEO Bob Cart "announced it is bidding for a 26-megawatt project that would ramp up to a capacity of 1,000 megawatts per year by 2015." I wonder if this was the mysterious project mentioned in my post, GreenVolts at BIG Solar?