MEMC Electronic Materials Inc.: Solar Powered

Jan. 7, 2010
Company continues push into the solar industry with recent acquisition

Slowing growth in the semiconductor industry has prompted many companies supplying the market to search for new opportunities in the alternative-energy field. After decades of providing silicon wafers for the semiconductor industry, MEMC Electronic Materials Inc. has stepped up efforts to become a major player in the solar wafer market.

Most recently, the St. Peters, Mo.-based company purchased an additional stake in Taiwan solar-wafer manufacturer Eversol Corp. MEMC initially purchased Gintech Energy's 8.36% interest in Eversol on Sept. 22. On Dec. 21, MEMC said it had invested $5 million for an additional 5.1 million shares, bringing its total ownership stake in Eversol to approximately 10.6%.

The acquisition is part of a larger strategy to grow the company's solar wafer business, said Ken Hannah, president of MEMC Solar Materials, when the move was announced.

"In addition to our plans to bring solar wafer manufacturing capability in-house, MEMC is identifying strategic partners for solar wafer manufacturing," Hannah said in a prepared statement. "With a mix of internal and external solar wafering capacity, we can minimize fixed costs and maintain the flexibility to satisfy growing levels of demand. As we implement this manufacturing strategy, we will continue to identify world-class strategic partners, such as Eversol."

The company initially entered the solar market around 2006 when it entered into deals with such companies as Suntech Power Holdings Co. to supply solar grade silicon wafers and has been steadily building the business ever since. In November, MEMC completed its $200 million acquisition of solar energy services provider Sun Edison LLC.

MEMC Electronic Materials Inc.
At A Glance

MEMC Electronic Materials Inc.
St. Peters, Mo.
Primary Industry: Computers & Other Electronic Products
Number of Employees: 4,900
2008 In Review
Revenue: $2.01 billion
Profit Margin: 19.33%
Sales Turnover: 0.68
Inventory Turnover: 16.99
Revenue Growth: 4.30%
Return On Assets: 13.42%
Return On Equity: 19.04%
Sun Edison manages the development, financing, operation and monitoring of solar power plants for commercial customers, including many national retail outlets, government agencies and utilities. The Beltsville, Md.-based company, which will retain its name as a subsidiary of MEMC, employs approximately 300 people.

When the acquisition was completed, Ahmad Chatila, CEO of MEMC, said the addition of Sun Edison will strengthen the company's position in the solar industry.

"Renewable, clean solar energy is still in its infancy as a growing global industry," he said. "Our role in reducing costs in both the components of solar modules as well as the actual solar plants will help to further accelerate this growth."

MEMC is coming off a third-quarter loss of $69.4 million compared with a profit of $183.6 million in the year-earlier period. The company attributed the loss to lower wafer prices for solar applications, increased costs due to disruptions at its Pasadena, Texas, facility and restructuring charges.

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