India's electronics system design and manufacturing industry has only one way to go, and that is up. Bettina Weiss, VP, Business Development, SEMI Global, talks about the global market scenario for semiconductors and the solar PV and also highlights the growth prospects for solar energy market in India, in an interaction with Pradeep Pandey. Edited Excerpts.
How do you observe the global market scenario for semiconductors, especially for solar PV?
For 2013, a modest single-digit growth is forecasted for the semiconductor industry, following two years of no growth and some contraction in the market. Investments in leading edge manufacturing from the foundries remain strong, and stronger selling prices for NAND flash device may result in an increase in investments later this year in that sector. Based on SEMI's data collection program, North America-based manufacturers of semiconductor equipment posted $1.14 billion in orders worldwide in March 2013. The bookings figure is 5.9 per cent higher than the final February 2013 level of $1.07 billion, and is 21.3 percent lower than the March 2012 order level of $1.45 billion.
In PV, according to NBuzz (April 22, 2013), Solar photovoltaic (PV) industry module revenues are forecasted to decline to 20 in 2013 to $20.5 billion from $25.5 billion in 2012. While revenues will remain below 2012 levels during 2013 and 2014, they are set to increase from 2015 onwards. With respect to India, a much awaited semiconductor fab announcement appears imminent. A viable and competitive fab will be a critical catalyst for the growth of the country's electronics industry.
India's electronics system design and manufacturing industry has only one way to go, and that is up. India's Department of Electronics & IT (DeitY) figures suggest that electronics demand will grow at close to 25 per cent a year and the local production-demand deficit by 2020 will amount to a staggering US$300B, opening immense opportunities for local electronics manufacturing. A fab would provide a crucial missing element in the local electronics eco-system.
In addition, we are particularly happy that solar PV has been included within the ambit of the Modified Special Incentives Package Scheme (MSIPS) announced in 2012 to attract investments in Electronics System Design and Manufacturing. The benefits of MSIPS are applicable to the entire solar supply chain from feedstock to power electronics.
How is the technological shift impacting the solar energy sector?
The end-user price of PV/solar will continue to be driven down by cost reductions in materials, processing and manufacturing improvements and refinements. Innovations and improvements across all steps of crystalline PV manufacturing value chain will have positive effects on costs and efficiencies. This includes improved poly-silicon production and wafering technologies, reduction of key consumables, reductions in wafer thickness, reduction in use of silver in metallization and the shift to copper, improvements in module glass (AR coated, less absorptive and thinner), use of encapsulants that are more UV transmissive, thus increasing the blue response of cells and improved contact technologies. TTV (total thickness variation), recombination losses, and finger widths will continue to reduce. All of these improvements will result in greater cell efficiencies and lower module costs. BoS costs will also move downwards in all geographical regions. Power electronics innovations in energy maximizers, smart energy routers and inverters will complement these trends driving down the total system cost of PV, spurring adoption. Other disruptive technologies such as high-efficiency broad spectrum, multi-junction solar cells, continuing innovations in thin films and flexible substrates will open up new possibilities and application areas.
In the Asian context, what countries have strong growth potential with regard to semiconductors and solar PV?
Southeast Asian countries, including Vietnam, Malaysia and Indonesia, are well on their way to entering the semiconductor manufacturing era. Most of these countries, along with an already well-positioned Singapore, have a strong backend (assembly and test) presence in the region, but there is a strong push for front end manufacturing and foundry business as well.
What are the factors influencing the growth in these regions?
A strong government vision along with a comprehensive investment strategy and public-private partnerships are key elements for growth in these regions. This extends to university education and workforce development efforts, investment in R&D as well as economic incentives to attract businesses.
What is the role of SEMI in this sector and how has it been supporting supply systems globally?
SEMI's role in this area is driven by the needs and strategies of its member companies. Many of the companies we represent support multiple technologies and applications, and it is important to leverage the synergies this creates. Thanks to SEMI's global footprint, we have resources on the ground close to most new or emerging markets. We leverage existing government relations and introduce member companies with strategic interest in a region to local, state and federal officials as well as economic development agencies and other supporting organizations, to help them transition into a new space.
How do you perceive the Indian National Solar Mission?
India recognized the potential of solar quite early and made investments in developing PV technology and commercializing it. However, it remained a very small player until the launch of JNNSM in 2010. The national programme was rolled out as part of the National Action Plan for Climate Change, recognizing the importance of solar energy in climate change mitigation efforts and energy security.
The ambitious and time bound targets of JNNSM created sufficent buzz in the industry like never before, and the awareness and interest in solar soared. Even state governments like Gujarat saw the merits of promoting solar and launched their own solar programmes. Leading Indian corporate houses like Mahindra and Mahindra, L&T, Reliance, Wellspun ventured into solar. International companies like Sun Edison and First Solar set up India operations while companies such as AEG PS opened state-of-the-art facilities to manufacture inverters. As a result, a whole new solar BOS ecosystem has sprung up, contributing towards India entering the Gigawatt club within only two years since the launch of the JNNSM.
As with any new and major Government programme, JNNSM has faced several issues at various stages of implementation. Feed-in-tariff, bidding process, financing, technology choice, and domestic content requirements were some of the key challenges. There are no clear solutions at hand yet, but lessons are being learnt and adoption is taking place.
What kind of activities your association has planned for India and other Asian countries?
In India we represent and support PV companies, primarily through the development of international manufacturing standards, workforce development courses, providing B2B linkages and government relations.
Like the rest of the solar PV industry, Indian manufacturers are focused on cost reduction and performance enhancement. We envision a more active role, through our membership, in supporting R&D efforts, as well as setting up a SEMI India PV Standards Working Group to identify areas for manufacturing process improvement and material standardization that would help achieve the twin goals. We also plan to undertake, studies on major issues that impact the Indian PV industry and recommend the way forward through white papers. Although India is one of the largest markets for electronics, it unfortunately does not have a manufacturing base for semiconductors yet. However, given recent announcements regarding semiconductor manufacturing, we are optimistic and look forward to contributing to the government's efforts to set up a fab.
Our regional offices in Asia, including China, Japan, Singapore, Taiwan and Korea were set up long before the India office was opened.
What is your overall perception towards the Indian market?
The Indian market will continue to grow at a rapid pace. The demand side is, obviously, extremely robust and deep, and despite the challenges, we are highly optimistic about India's solar growth.
Aside from the remarkable growth in solar power plants in the last 2 years since the launch of national and state policies, rooftop PV is already economically viable and at grid parity, especially at the higher consumption end of the spectrum, and in some locations. Policies, such as in Kerala (10,000 rooftops) will show results and will be replicated across the nation and help to expand adoption. Off-grid applications, driven by rural needs and creative financing models will continue to grow. Solar for water pumping is a huge market and with the fiscal pressure on government to roll back energy subsidies, rising diesel prices will make solar water pumping extremely attractive. Telecom base stations, urban, road and highway lighting are other well known segments with huge headroom for continuous growth. The challenge in India is to see that the benefits of solar installation growth will flow backwards into the manufacturing sector. The last two years have seen India's established manufacturers struggle against the global price collapse and oversupply conditions despite dramatic solar generation capacity growth in the country and their reputation for quality products. This needs to change through a combination of manufacturing incentives, adoption of standards and by enabling the development of a complete manufacturing eco-system for the true benefits of solar to accrue at a national level. An economy the size of India must not become solely a consumer of solar technology as it has much to offer the world. Building a local manufacturing base has huge benefits for the nation's economy - as a generator of jobs, in substantially allowing product-price innovation and from an energy security viewpoint.
What kind of reforms would you suggest for better growth in India?
Low interest rates and the fast tracking of financing for solar in combination with tax benefits for solar adopters and rationalized taxation for manufacturers can push solar into the mass market. Once it becomes a mass market solution, installation, deployment and maintenance issues will automatically be ironed out and the cost of solar will fall further, leading to a virtuous solar adoption cycle.
Micro, Small and Medium Enterprises (MSMEs) need to enter the solar space in a big way in order to be able to take the benefits of solar to every corner of the country and address local issues of installation & and maintenance.
In the last few years, a large chunk of solar PV installations in India have been based on components sourced from international suppliers and at different cost points. Given the competitive price pressures, there is great need for awareness, propagation and adoption of quality standards for solar PV components and a code book of best practices for installation in order to ensure long term performance and reliability and to prevent setbacks to growth due to disappointing system performance.
At the policy level we welcome speedy implementation of the JNNSM-Phase 2 and state policies including the implementation of SPOs (solar purchase obligations) which will drive growth either directly or through the REC market.
A technology development venture fund for solar would help incubate and foster innovation in products and solutions suitable to local needs. The fund must target innovation and product development in power electronics and balance-of-systems in addition to the materials, cell/module technology and automation areas.
How many Indian companies have association with your organization, name few of them?
Over thirty Indian companies are engaged with us. Tata Power Solar, Lanco Solar, Emmvee Solar, Shan Solar, Solar Semiconductor, Indosolar are some of the Indian companies who have joined SEMI and are contributing to our activities. Some of the top executives from these companies are members of the SEMI India PV Advisory Committee which set the yearly agenda and strategic priorities for an association in India.
Semiconductor Equipment & Materials International (SEMI)SEMI is the global industry association serving the manufacturing supply chain for the micro and nano-electronics industries, including:
- Photovoltaics (PV)
- High-Brightness LED
- Flat Panel Display (FPD)
- Micro-electromechanical systems (MEMS)
- Printed and flexible electronics
- Related micro- and nano-electronics