THE SOLAR INDUSTRY

EES Energy & Environment

solutionsAn Applied Materials Business Unit

SUMMARY1. Introduction to PV technology2. Size of the market3. Drivers of the industry

1. Benefits from customer perspective2. Others

4. Five forces analysis5. EES business unit6. EES value chain7. EES resources8. Recommendations

1. INTRODUCTION TO PV TECHNOLOGY

2. SIZE OF THE MARKET & FORECAST

3. DRIVERS OF THE INDUSTRY(BENEFITS FROM CUSTOMER PERSPECTIVE) Ethical technology

Free from energy bills

When connected to the grid saving can be substantial

Overnight it is possible to generate electricity through battery bank system

The conversion from DC to AC current is made by an inverter

3. DRIVERS OF THE INDUSTRY(BENEFITS FROM CUSTOMER PERSPECTIVE)

3. DRIVERS OF THE INDUSTRY Laws and Regulations

Feed in Tariffs are tax reductions or debates over energy bill for a period of time, promoted by Governments to push on the PV.

Principles: Priority connection for all PV systems granted Each solar kWh must be purchased by the utility Fixed feed-in tariff payment over 20 years

Reduction of the feed-in tariff each year by X% for newly installed PV systems

Every country has its own tax reduction policy which is under a specific act

USA: American Recovery and Reinvestment Act of 2009. $117.6 million is allocated for specific activities within the Solar Energy Technologies Program (Solar Program);

PRC: Golden Sun Policy issued in 2009; GERMANY: They started in 1991 with FIT and then continued with

several amendments of the first version of the law (EEG).

3. DRIVERS OF THE INDUSTRY

Energy Mix is not an option By 2030, the Reference Scenario, which assumes no

change in government policies, sees world primary energy demand a dramatic 40% higher than in 2007;

China and India represent over 53% of incremental demand to 2030;

Fossil fuels remain the dominant sources of energy worldwide, accounting for 77% of the demand increase in 2007-2030;

Electricity demand grows by 76% in 2007-2030, requiring 4800 GW of capacity additions – almost five times the existing capacity of the US;

Emissions MUST be reduced and renewable energies can help in order to avoid a 7° increase in Temperature which would lead to dramatic consequences.

3. DRIVERS OF THE INDUSTRY

4. FIVE FORCES ANALYSIS (THREATS OF NEW ENTRANTS) Economy of Scale

Reducing cost per Watt produced Forcing the experience curve

Challenge in choosing the right technology to start with

4. FIVE FORCES ANALYSIS (BUYER POWER) Many sources of reneawable and non

reneawable energies, according to their availability: Wind Biopower Geothermal Hydropower Reneawable fuels Advanced water power

Ample choice both in technology and competitors

4. FIVE FORCES ANALYSIS (SUPPLIER POWER) Over supply of Silicon and last year low

demand have put them into a weak position;

It has been estimated about 5.1 GW of “outstanding” silicon cells;

Alternative thin film technologies need less material, in the range of 1/100 of crystalline Silicon.

4. FIVE FORCES ANALYSIS (THREAT OF SUBSTITUTES) Substitute energy sources depends by the

location and average temperature (energy loss due by thermalization)

Cost per Watt of conventional energy from the grid

4. FIVE FORCES ANALYSIS (COMPETITORS) Crowded industry

4. FIVE FORCES ANALYSIS (WRAP UP)Threats of new entrants

Buyer power

Supplier power

Threat of substitutes

Competitors

Assuming the same weight for each force……

5. EES BUSINESS UNIT Mark Pinto, GM of EES business unit; 1 Billion of dollars in Revenues achieved in 4

years; About 500 M invested in the BU from the

start; Developed the sunfab business model; They bet on thin film and a-Si but also

produce c-Si; Providers of turn key solution for

manufacturing and control PV throughput – integration of hardware, software and process

6. EES VALUE CHAIN Primary activities:

Supply chain management Operation management Research and developement Sales

Support activities: Human Resources After Sales Finance and control

Low Cost

leadership

7. EES RESOURCES

Acquisitions

HCT (CH): specialized in manufacturing equipments for slicing ingots of Silicon;

BACCINI SpA (IT): back end solutions to improve efficiency and productivity of c-Si production lines

SEMITOOLS (USA): low cost porous silicon process ADVENT SOLAR (USA): Emitter wrap through

technology eliminating string ribbons contacts

Tangible Assets

Xi’An facility: located in the Shaanxi province, it covers more than 400.000 ft2 and employ about 300 people. Used as showroom and technology development center.

2006 2007 2008 2009 2010AM

ATacquires

HCTShapingSystem

s SA

AMAT enters

in the SOLARBUSINESS

AMAT

acquiresBACCINI

SpA

AMAT acquires

ADVENTSOLAR

AMAT

acquiresSEM

ITOOLS

8. RECOMMENDATIONS

Improve a-Si effieciency. >10%

Keep pushing on operational efficiency

Keep staying where the market is.Far East primarly and then Europe and USA. Focus only in few key markets.

Keep under control other technologies which are actually more performing than a-Si (c-Si) and the next generation soalr cells.