In many respects, solar startup Twin Creeks Technologies was a failure, representing the classic missteps of Silicon Valley’s efforts to back promising cleantech startups.
The company raised over $90 million from Valley venture capitalists for its solar manufacturing tech, launched in the spring of 2012 with much fanfare, and less than a year later its assets were sold for much less than it raised — $10 million in an initial payment — to solar materials giant GT Advanced Technologies. Like several other startups before it — and after it — Twin Creeks even left angry politicians and workers in its wake, after taking in $26 million in loans from the state of Mississippi, and promising hundreds of local green jobs in a downtrodden economy.
But like the complicated story of cleantech itself, that’s not the end of the story for the technology that got its investors, employees and press initially excited. Twin Creeks’ Hyperion machine — which can slice materials like silicon for solar cells, but also sapphire crystals for different applications — could one day be used to cut very thin, ultra-strong, sapphire screens for Apple’s future iPhones.
Apple changes the game
For a couple years GT, which built a business making solar manufacturing equipment and materials, was swept up by the struggles in the solar sector. While solar panel customers were benefiting from some of the lowest prices in history, the companies that made those panels, and the components in those panels, were facing prices so low that many were going out of business. The price of silicon, the key ingredient in solar cells, had dropped dramatically, and there was a flood of super-cheap Chinese solar panels on the market. Between late 2010 and late 2012, GT’s stock dropped from over $15 per share to under $3 per share.
Clearly GT needed to diversify out of solar, and turns out its sapphire business — its furnaces, equipment and material production capacity — would provide the key to that. Sapphire crystal, which is much stronger and less breakable than glass, is starting to be used for components, screens and casings for consumer electronics. Apple has already used sapphire crystal for the fingerprint reader in its iPhone 5s, and other phone makers have used it for camera lens covers.
But the problem with sapphire glass is that it’s generally expensive to make; traditionally far more expensive than the Gorilla Glass made by Corning, which Apple uses for its iPhone screen. However if GT could find a way to lower the cost of making the sapphire crystal, perhaps phone makers would use sapphire glass for the entire screen as well.
A couple months ago, GT Advanced Technologies scored a game-changing deal with Apple to provide Apple with sapphire production technology for components. It’s unclear exactly what the sapphire will be used for, but it is clear that it’s a major initiative. Apple is providing a facility in Mesa, Arizona that will employ 700 workers, and is also investing $578 million to develop the plant. According to reports the factory will be ramping up next month to create a “critical new component.” GT’s share price has risen in the wake of the Apple deal announcement to over $10 per share.
The Hyperion machines
So where does Twin Creek’s tech come in? The machines that Twin Creeks developed, called Hyperion, are able to cut silicon and sapphire into thin slices for much less cost than traditional methods. The machines can cut a thick block of silicon by bombarding it with hydrogen ions down to the depth of 20 microns. The ions create a bubble layer, and when the wafer is moved to a furnace and heated, the bubble expands and separates the 20-micron top layer from the rest of the silicon block. The remaining silicon block is then used again and again, instead of thrown out and wasted. Traditional silicon wafers are closer to 200 microns thick, and the Hyperion machine was supposed to be able to reduce the capital equipment expenditures for a vertically integrated solar company (one that makes silicon and the cells) by 50 percent.
The slicing process is similar with sapphire. GT has said that it sees a lot of promise with Hyperion for “thin sapphire structures that we believe will have broad use in consumer applications.”
GT is so excited about the Hyperion technology that in its recent earnings call it called it “one of the most exciting technologies in our portfolio” and said “Hyperion could rival the size of our PV business in its peak.” GT also owns 50 issued and pending patents around Hyperion and said in the call:
“[W]e believe this tool is the first-of-its-kind in the world.”
That said, it’s unclear if Hyperion is currently being employed within the current development of Apple’s sapphire factory. GT said it has a pre-production Hyperion machine in operation now, and the technology is supposed to be more widely commercialized in 2015. It’s only been about a year since GT purchased it from Twin Creeks. But Apple has never been one to shy away from investing in tomorrow’s cutting edge technologies.
The complexities of cleantech
If Twin Creek’s slicing technology does end up playing a key role in future iPhone screens, it would underscore the complexities of the clean technology sector, and the short comings of the venture capital model in getting clean technologies to market. As we’ve written many times before, the long timelines and the high capital requirements to bring solar manufacturing technology — however promising it might be — to market are out of whack with the short timelines and low capital requirements preferred by VCs.
Twin Creeks raised over $90 million, but that wasn’t enough to scale the technology into a commercial product, particularly during a time (post-Solyndra) when VCs were losing their appetite for new solar tech. In this case (if it is used in sapphire screen production for Apple’s next iPhone), it would take GT’s and Apple’s large half a billion dollar investment in building out the production to see the tech reach its potential.
More and more new clean technologies are being developed under the wing of large corporations that have deep pockets, rather than in the garages of scrappy entrepreneurs in the Bay Area.