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Summary:

Can the Khosla-backed solar startup Stion become a serious contender in the solar world? While the company touted a $50 million investment from chipmaker TSMC yesterday, Stion has actually raised a $70 million round, and will use that to expand its annual production from 10MW to 100MW.

Can the Khosla-backed solar startup Stion become a serious contender in the solar world? While the company touted a $50 million investment by chipmaker Taiwan Semiconductor Manufacturing Co. yesterday, the startup says today it has actually raised a larger $70 million series D round, and it plans to use that money to expand its factory from 10MW to 100MW in annual production.

Getting to that 100-megawatt capacity is important for any startup that wishes to survive in a market where the top players, such as First Solar and Suntech Power, already have more than 1 gigawatt of production lines. Without scale, new comers aren’t going to be able to quickly lower its production costs. Stion currently has a 10-megawatt pilot production line and previously raised $44.6 million.

The San Jose, Calif.-based Stion, founded in 2006 with venture capital funding from the likes of Khosla Ventures and Lightspeed Venture Partners, is one of the hopefuls in developing copper-indium-gallium-selenide (CIGS) thin films (it apparently adds sulfur to the mix as well). CIGS technologies promise to deliver low-cost solar panels, but getting the right concoction of that many materials also has proven far trickier than what some of the CIGS startups initially anticipated. Companies that have raised far more money than Stion, such as Nanosolar, MiaSole and HelioVolt, all have experienced delays in bringing their technologies to commercial production.

Stion is producing panels with 110- to 130-watt ratings, and it claims a panel efficiency of 10 percent to 11.8 percent, according to its product datasheet. Those are not stand-out numbers among its CIGS peers or when compared with the 11.1 percent efficiency from First Solar’s panels. Although First Solar makes panels with cadmium-telluride solar cells, the company – largest solar panel maker – has long set the bar for any thin-film companies that wish to stay in business and grow.

Bulking up its manufacturing will be key for CIGS companies, all of which are small. Some of them only recently started mass production. MiaSole, for example, told us back in May that it would likely ship 20-30MW of solar panels this year and hundreds of MW of panels by the end of 2011. Nanosolar completed a 640MW factory and started mass production last year, but as of last September, it was producing solar panels at the rate of 1 megawatt per month. Stion plans to reach the 100MW factory capacity over the next year, according to VentureWire, but that doesn’t mean it will ship that many right away.

The startup’s deal with TSMC does set it apart. The two companies have signed a series of licensing and joint-development agreements that will see TSMC producing solar panels for Stion. TSMC, which has taken a 21 percent stake in the company with $50 million in investment (part of the Series D), will produce “a certain quantity of solar modules,” the chipmakers has said. This partnership will give Stion the ability to offer more solar panels without needing to spend the millions to build additional factories.

TSMC is the world’s largest contract chipmaker, so it has deep experience in mass production. The company has declined to divulge more about its agreements, so it’s unclear where it will set up production for its deal with Stion.

Stion isn’t TSMC’s first solar bet. It was only last December when TSMC said it would take a 20 percent stake in Motech for $193 million. Motech, also based in Taiwan, makes crystalline silicon solar cells.

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By Ucilia Wang

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  1. What’s the noise about? “Big company invests in tiny one”? “PV start-up raises money”?

    Vinod well knows that TSMC is not known for its ability to do anything but foundry. So this tie-up does not seem strategically significant, but rather a call option for TSMC as it takes various punts on PV.

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    1. TSMC can be a foundry to the solar industry. It’s not easy for new comers to raise the necessary money to scale and build factories these days. And it will only get harder for startups to chase after larger players, some of whom already have hit the 1GW capacity. You’ve seen it in the chip industry — chip startups focus on engineering and design, and they hire foundries to make the products. Solar startups could do the same.

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  2. Steve Geiger Tuesday, June 22, 2010

    People used to engineering and replicating high-value nanometer structures on a standardized platform may not find the jump to (relatively) low-value, large-area substrate processing on unstandardized platforms and materials so easy.

    We shall see.

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  4. [...] with some in the pilot stages and running factories far less than 100 megawatts. I wrote a story for Earth2tech about the importance of crossing the 100-megawatt threshold when Stion, a Silicon Valley startup [...]

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