The Chip to Solar March Continues, Intermolecular Enters Solar Fray

im_f30_06smallIntermolecular, a company that has developed a process used by semiconductor companies like AMD to speed up research and development of chip technology, says it’s ready to expand into the solar market. It is already “deep in discussions” with several potential thin-film and crystalline-silicon solar customers, CEO David Lazovsky tells us. The company, which plans to formally announce the news on Tuesday, intends to target large solar-panel manufacturers, manufacturing-equipment suppliers and material suppliers.

The move is the latest example of semiconductor technology crossing into the solar industry, and a sign that in the downturn companies are looking outside of their traditional target markets to find new growth. As proof of its serious solar intent, Intermolecular has hired Craig Hunter — best-known as the founder and former general manager of semiconductor-equipment manufacturer Applied Material’s thin-film solar business — as the vice president and general manager of its solar program. Since leaving Applied Materials in 2007, Hunter had been an entrepreneur in residence at venture-capital firm Sequoia Capital, where he focused on the photovoltaic industry.

Lazovsky tells us that while the 5-year-old, San Jose, Calif.-based Intermolecular grew its revenues more than 200 percent last year, this year the company forecasts growth more modestly, at about 35 percent, excluding its new solar business. Lazovsky wouldn’t disclose Intermolecular’s revenues, but he said the company, which employs 114 people, expects to turn a profit this year.

Part of the company’s solar moves will be fueled by recently-raised funding. In January, Intermolecular raised $20 million from CMEA Ventures, Redpoint Ventures, Symyx Technologies and US Venture Partners. That funding was on top of $36 million it raised in 2007.

Slower growth in the chip industry could be a key reason for Intermolecular’s sunny moves. The chip industry has been a mature industry for years, whereas solar is still ramping up relatively fast. “It’s an opportunity to take our existing capabilities and point it to a market that’s frankly very high growth,” Lazovsky said. Crosslink Capital in January predicted the solar industry would see a compound annual growth rate of 53 percent from 2008 to 2012, while BBC Research in August forecast a rate of 17.3 percent from 2007 to 2012 for the semiconductor industry. Intermolecular also expects solar’s growth to accelerate. “If you look at the size of the solar market today, versus the size it could be if we could get costs down, there’s tremendous elasticity and demand,” Hunter said.

craig_p1010837smallAnd while the solar industry has been hit hard by the recession, too, the company thinks the downturn will actually help create a market for its solar R&D processing technology. With solar prices dropping and deeper discounts expected all companies are under pressure to reduce cost and increase efficiency, says Intermolecular’s Hunter.

Lazovsky descibes Intermolecular’s solar technology as a set of processing tools that can be used to conduct hundreds of experiments at the same time, as well as software that can process and evaluate the results of all the experiments to help customers select those most likely to bear fruit in high-volume manufacturing. The tools essentially miniaturize the experiments so that they are conducted on pieces of substrate smaller than a square inch, he explains.

One potential drawback is that experiments that work at a small scale in the labs don’t always work the same way when they scaled up. But Lazovsky said Intermolecular reduces that risk with a number of “process correlation” tools and methods, as well as a statistical team, to help determine how well the results are likely to translate into high-volume manufacturing. Hunter says the company has the necessary expertise in manufacturing to help determine what would and wouldn’t make sense in a manufacturing tool.

In the chip biz, Intermolecular’s technologies have helped companies find better ways to deposit, etch and interface semiconductor materials to make chips more efficient and lower-cost. Lazovsky says customers have been able to conduct R&D 100-200 times faster, on average, than with conventional experimental techniques. Intermolecular is betting that the same advances that delivered low-cost, higher power chips, can now be used to improve solar devices and processes and help the solar market boom again.

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