Diapositiva 1

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CASE CHALLENGE 2007 Power Generation of the
Future Team Aukin EADA Business School 3rd of
February, 2007.
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Outline

• SWOT
• Industry Forces
• Value Chain Bottlenecks
• Silicon Supply Shortage
• Value Chain Efficiency
• Price Competitiveness
• Production
• RD Focus
• Integration
• Location
• Action Plan

analysis
benchmarking
operations
strategy
3
analysis
4
SWOTinternal side
analysis

• Untapped cost savings potential.
• Wafer breakage.
• Highly diversified RD.
• New people integration challenge.

• High growth rate (161).
• Profitability rate (15).
• Strong equity base due to IPO.
• Top-notch production lines.
• International customer base.
• Location in the PV Hotspot.

Strengths
Weaknesses
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SWOTexternal side
analysis

• Climate change.
• Risks of non-renewable sources of energy.
• Strong growth of PV market.
• Government support (OECD).
• Abundance of raw silicon.
• Technological advances.
• Possible cluster integration.

• PV still minor player in future energy mix
  (0.3).
• Shortage of purified silicon.
• Price competition.
• Dependence on governmental incentives.
• Competition with multinationals.

Opportunities
Threats
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Industry Forces
analysis
OLIGOPOLY
FRAGMENTED
Cell Producer
PV SystemsBuyers
Suppliers
Strong bargaining power of silicon suppliers
determines pace of PV industry.
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Value Chainbottlenecks
analysis
Silicon
Cells
Modules
Systems
Ingots Wafer
as-is
Price Competitiveness

Value Chain Efficiency
-
-
Silicon Supply Shortage
Silicon
Ingots Wafer
Cells
Modules
Systems
to-be
Industry growth requires an optimized value chain.
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benchmarking
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Silicon Supply shortages
benchmarking
SolarWorld / Degussa
Sharp Kyocera
Shell Solar
benchmark
reduce
secure
avoid
best practice
application
Supply Contracts Silicon Reduction
Desinvest ? CIGS
Joint Ventures
Source Company Web Sites
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Silicon Supply shortages
benchmarking
benchmark
Plastics Industry

• DuPont
• Rising oil price makes production expensive.
• Developing fibers out of corn (Sorona).
• Oil-based back-up to fight Shells Corterra.

best practice
Source www.dupont.com

• Source alternative raw materials.
• Keep existing process in the short run.
• Shift to new technology secretly.

application
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Value Chain efficiency
benchmarking
benchmark
Semiconductor Industry

• STMicroelectronics
• Cross-functional process development teams.
• Learning curves of 68 to 73 in wafer processing.

best practice
Source Applied Economics

• Use cross-functional teams (production
  technology transfer).
• Exploit learning potential of current production
  lines.

application
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Value Chain efficiency
benchmarking
benchmark
Denver Cluster

• Input of various industry clusters.
• Many small and specialised businesses.
• Higher level of energy research.
• Energy-related education programs.

best practice
Source www.metrodenver.org

• Use your competition to develop competitive
  advantage.
• Work towards proximity of all key production
  factors.

application
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benchmarking
Contracts. Silicon Reduction. Alternative
Sourcing.
Silicon Supply
Learning Curve. Technology Transfer. Communication
.
Value Chain Efficiency
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operations
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Overview
operations
This is how we perceive the companys current
situation.
100
Limited Hong Kong Sales Asia
67
Solibro GmbH Tech thin film CIGS Location
Thalheim
100
Brilliant 234 Tech thin film Si Location
Thalheim
15
Flexcell (SUI) Flex., thin film mod.
100
Calixo GmbH Tech thin film non-Si Location
Thalheim
12
Solaria (USA) Tech solar accesory
CSG Solar Tech crystalline Si on glass Location
Thalheim
Ever Q Tech string RibbonTM wafer Location
Thalheim
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33
REC solar electric designs and installations
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Productioncore product
operations
Identify the source of profit Q6L.
Source QCells third quarter 2006 Report
Sales 2006
Sales 2005
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Productioncapacity
operations
Cost reduction by increasing capacity
Source QCells third quarter 2006 Report
38
21
36
38
43
Production between 50 to 70 of total capacity
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RDtechnology
operations
Silicon dependency can be avoided.
Reference
Technology Comparison
CIGS
a-Si
CdTe
Si
tf Si
Low Production Cost Potential for Production Cost
of lt1.00/kWh
Nuclear Energy ? 1,5 2,5 ct/kWh Wind
Energy ? 3,0 7,0 ct/kWh
Potential for High Cell Efficiency 17
Nuclear Energy ? 30 40 Wind Energy ?
30

• No Silicon needed
• Efficiency close to 20
• Layer on Glass

TARGET TECHNOLOGY CIGS
Source International Solar Electric Technology,
Inc. Q-Cells AG, Driving The Pv Industry Towards
Competitiveness Bundesministerium für Umwelt
(BMU)
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operations
Reduction of Fixed Cost. Core Product. Learning
Curve.
Production Focus
Decrease Failure. Increase Production Cell Thickne
ss,Efficiency,Format.
RD Focus
Focus on CIGS.
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strategy
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Integrationvalue chain
strategy
Silicon
Ingots Wafer
Modules
Systems
Inbound
Outbound
Potential to reduce cost.
Fragmented international market.

-
Potential to reduce dependency.
Development away from core competencies.

-
High entry barries for silicon industry.
Cost savings potential.

-
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Economies of scale Increased power over
suppliers Increased power over customers
Integrationvalue chain
strategy
Silicon
Ingots Wafer
Modules
Systems
Silicon
Modules
Systems
Incorporating Si Thin
Film String ribbon wafer Develop CIGS
CIGS
STANDARDISATION
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LocationPEST Germany
strategy
Political
Environmental

• Renewable Energy Sources Act (EEG)
• Subsidies
• Cooperative Local Government

• Industrialised Nation
• Limited Natural Resources

Social
Technological

• High Public Awareness
• HR Availability

• Know-how Hub
• 1 GW installed

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Locationrenewable energy cluster
strategy
Renewable Energy
83
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Bundesrat 69 Representatives FEDERAL LEGISLATION
Lobbying
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Locationrenewable energy cluster
strategy
Success Factors
Stakeholders
Competitive Advantage
Production Factors

• Labour
• Management Schools.
• Technical Schools.
• Research Institutions.

INNOVATION STANDARDISATION SPECIALISATION
Competition

• Institutions
• Tax Incentives.
• Infrastructure.
• Promotion.

Productivity

• Companies
• Suppliers.
• Customers.

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Locationinternational expansion
strategy
ASIA
Distance to market Logistics cost Long
communication channels Reduced competitiveness
NORTH AMERICA
Short term Export Medium term Warehousing Long
term Production
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strategy
Technology Integration. Downstream
Standardisation.
Integration
Political Risk. Short-term Exports. Renewable
Energy Cluster
Location
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action plan
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Action Plan
Focus on CIGS. Technology Incorporation.
RD
Core Products. Learning Curve. Capacity
Management.
Operations
Grow Exports. Foster Standardisation.
Sales
Lobbying. Cross-department Teams.
Management
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Thank you
Team Aukin (Ah Kin God of the Sun)