CPV-7: Concentrating PhotoVoltaic Germanium Supply Chain

Germanium wafer capacity and worldwide germanium (Ge) metal reserves.

umicorelogo During the CPV-7 (7. International Conference on Concentrating Photovoltaic Systems) Industry Evening Session, the Energy Materials, Electro-Optic Materials business unit, of the Umicore Group (EBR:UMI) presented “Germanium wafers & Germanium availability” in their allotted four (4) minute time slot.

Umicore invested around $51 Million in the new Quapaw, Oklahoma USA, germanium wafer production facility with capacity for 400000 wafers and expandable to 900000 wafers per year in 4” (four inch, 100 mm) equivalents. Umicore estimates the expanded facility can produce enough Ge wafers for up to 750 MW (MegaWatt) of III-V multijunction terrestrial solar cells used in High Concentration PhotoVoltaic systems assuming 40% III-V solar cell efficiencies. The Quapaw facility produces both 4” and 6” (six inch, 150 mm) Ge wafers and also has germanium recycling capability.

Quapaw augments existing Umicore capacity of 600000 Ge wafers (datasheet) per year located in Olen, Belgium. Thus Umicore has global capacity for 1 million Ge wafers in place and swift expansion to 1.5 million Ge wafers is possible based on market demand.

Germanium Reserves
According to the U.S. Geological Survey’s (USGS)
2011 Germanium Mineral Commodity Summary, worldwide germanium consumption was about 120 MT (Metric Tons) in 2010. The USGS estimates United States germanium reserves are 450 MT but could not estimate worldwide reserves. Excluding recycling, Umicore estimates known worldwide germanium reserves are greater than 12000 MT (Source: Umicore 2011), and there is potential to double annual consumption to 240 MT in the near term. Around 30% of annual germanium consumption is already from recycled materials.

Per the USGS summary:

The major end uses for germanium, worldwide, were estimated to be fiber-optic systems, 30%; infrared optics, 25%; polymerization catalysts, 25%; electronics and solar electric applications, 15%; and other (phosphors, metallurgy, and chemotherapy), 5%.

Umicore claimed 1 GW (GigaWatt) of CPV requires about 10 MT of germanium. I heard a 6” Ge wafer weighs about 18 to 20 grams; germanium has an atomic mass more than twice that of silicon (Si). Germanium dioxide (GeO2) is the primary feedstock for the germanium ingot Czochralski growth process, and 4N (99.99%) purity GeO2 was priced at $1100 per kilogram in March 2011 for European Union market delivery per Metal-Pages.

Germanium Wafer Competition
AXTJan2011Needhamslide10 Umicore dominates the germanium wafer market. AXT, Inc. (NASDAQ:AXTI) is the nearest Ge wafer competitor and claimed to have 15% share of the $50 Million dollar 2010 market in a January 2011 AXT presentation by Chief Financial Officer Raymond A. Low at the 13th Annual Needham Growth Conference. AXT holds a 25% minority equity stake in a Ge wafer joint venture with Xilingol Tongli Germanium Co. Ltd. and delivered the first commercial order for 6” Ge wafers in 2010. According to “AXT, Inc. Announces Fourth Quarter 2010 Financial Results”:

Germanium (Ge) substrate revenue was $3.4 million for the fourth quarter of 2010 compared with $2.3 million in the third quarter of 2010 and $1.9 million in the fourth quarter of 2009.

Umicore to double germanium wafer output” by Compound Semiconductor on June 27, 2008, cited “Utah-based start-up Sylarus recently emerging as a third competitor with 6-inch production capability”. Since then, 5N Plus Inc. (TSE:VNP) acquired a majority stake in Sylarus Technologies and a new wafer slicing method may provide a competitive advantage.

III-V multijunction terrestrial solar cell entrant JDS Uniphase Corporation (NASDAQ:JDSU) is very bullish about CPV. JDSU believes CPV installations could reach 100 MW in 2011 and 1 GW or 20000 6” Ge wafers per week of III-V solar cell production will be achieved by 2015 dwarfing wafer growth for wireless applications as shown in the Picasa slideshow below. The transition from 4” to 6” Ge wafers was a key III-V solar cell cost reduction theme at CPV-7.

While the CPV deal flow continues to be positive (“SDG&E signs three renewable power contracts with Soitec for up to 30 MW of locally generated solar power” today, for example), I can’t yet picture a 2011 pipeline resulting in 100 MW of installations. The larger multi MegaWatt projects with utilities just take longer to develop, permit, finance, construct, and interconnect.

If the JDSU 1 GW CPV forecast is correct, the germanium wafer supply chain is overdue for a leap of complexity perhaps requiring cell manufacturers to sign take or pay Ge wafer contracts to insure supply.

Update:
AXT, Inc. is now shipping 200K (200 thousand) Ge wafers per year and have about 300K annual Ge wafer capacity. AXT said: “Since a lot of our production capability in GaAs can be switched over to Ge as necessary, we can easily double it to 600K.

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