News Article
Veeco Pulls Out Of CIGS Sector
Company decides loss making venture has too long to return investment
Veeco Instruments announced its financial results for the second quarter of 2011 and included the announcement that they intend to pull out of all CIGS Solar Systems activities stating that the changing dynamics and levels of success of competing technologies has seen and ever diminishing return for their CIGS sector. Overall the company reported positive growth in all sectors it is in except CIGS. While some commentators are trying to draw conclusions as to the state of CIGS or the overall solar industry, it appears more indicative of the expected industry changes when this many companies and technologies compete for a market currently less than their entire output.
The changing view of the company towards CIGS also points towards the improved performance of other technologies. When Veeco enterd the CIGS game, aiming for $1 per watt output still seemed the holy grail but CIGS manufacturers have no doubt discovered that this figure will not help with market penetration and the expectations of each technology choice has increased greatly.
Veeco's second quarter GAAP results were negatively impacted by approximately $51 million in asset impairment and restructuring charges related to this business. In addition, approximately $20 million in CIGS deposition systems has been removed from Veeco's backlog. Effective third quarter 2011, Veeco will treat its CIGS Solar Systems business, which operated at a loss, as a discontinued operation.
John R. Peeler, Veeco's Chief Executive Officer, commented, "Veeco has decided to exit the CIGS Solar Systems business for various reasons, including the improved performance of mainstream solar technologies and the lower than expected end market acceptance for CIGS technology to date. While CIGS remains an important thin film solar technology, we have determined that the timeframe and cost to successful commercialization are not acceptable to Veeco."
Mr. Peeler added, "The closure of our CIGS Systems business is expected to have an immediate and positive impact to Veeco's profitability." Veeco will continue to sell CIGS deposition components and remains the top supplier of MOCVD and MBE tools to the concentrator photovoltaic (CPV) market.
Despite the CIGS imminent closure, solar was not a complete loss for the company and with other sector involvement the company has other aspects to promote.
"Veeco's second quarter bookings were a record $311 million," continued Mr. Peeler, "up 35% sequentially. LED & Solar orders were a record $273 million, with MOCVD orders up 34% sequentially to $250 million. While China was again the main region for new systems purchases, Korea showed signs of improvement, including a multi-system MaxBright(TM) MOCVD order from an important LED industry leader. Veeco also reported a strong MBE bookings quarter of $24 million. Data Storage orders were $38 million, up 15% sequentially. The Company's Q2 2011 book-to-bill ratio was 1.17 to 1, and quarter-end backlog was $558.2 million."
Veeco has involved itself in a number of CIGS related research ventures and has decided to ensure their CIGS legacy will not be pushed aside as the company has had to do to the CIGS division.
Peeler commented on the research decisions., "Veeco intends to transfer our R&D facility, pilot line, technology and key personnel in Clifton Park, New York to the College of Nanoscale Science and Engineering (CNSE) in order to support their planned CNSE/SEMATECH Photovoltaic Manufacturing Consortium (PVMC). We believe the PVMC is much-needed to drive CIGS industry roadmaps, collaboration, market acceptance and commercialization."
