Established in May 2007, Tainergy intends to begin mass production of solar cells on its first production line in northern Taiwan by March 2008. According to Tainergy Chairman Frank Hsieh, the initial target is 50 megawatts per year from the first production line.
Tainergy is a subsidiary of Kenmec Mechanical Engineering Co. Ltd., a company noted for the development of automated factory technology in Taiwan. Kenmec also supplies thin-film-transistor panel manufacturing equipment to the world's major flat-panel makers, including Sharp Corp., AU Optronics Corp. and Chi Mei Optoelectronics Corp.
"Our participation in the solar energy sector marks a new milestone in Kenmec's 31-year history," said Hsieh, who also serves as the chairman of Kenmec. "We believe solar energy will be a promising business in the next three decades as people become more receptive to green energy. The market may be highly competitive. However, with sufficient capital and strong management team, Kenmec is confident and ready to face the competition and challenges."
The firm aims to expand the number of production lines in Taiwan from one to three by 2009, increasing output from 50 megawatts to 200 megawatts. Twelve additional production lines are planned for Suzhou, China, with a combined total output of 600 megawatts per year, Hsieh added.
To fund the construction of new production lines, Tainergy will seek to increase its capital to US$15.2 million this year and to US$30.3 million in 2008. Despite the initial startup costs, Hsieh estimates that Tainergy's revenues could amount to as much as US$152 million in the first year of operation.
Hsieh made these remarks after signing an agreement to acquire equipment and know-how with solar-cell equipment supplier Centrotherm Photovoltaics AG, one of the three leading German firms that produce solar cells.
Demand for solar-cell equipment is expected to grow between 15 and 20 percent annually around the globe, with an output of 1 gigawatt a year, said Hans Autenrieth, managing director of Centrotherm Photovoltaics.
But according to an expert at the Industrial Technology Research Institute, the rosy predictions may be more difficult to achieve than anticipated. Local solar-cell makers need to surmount three barriers in order to be successful: a stable supply of technical expertise and key raw materials, economy of scale, and sufficient demand for the solar cells.
Tainergy will face stiff competition, as Taiwan's market is already crowded with solar-cell producers such as Motech Industries Inc., E-ton Solar and Gintech Energy Corp. As a result, the business might not be as profitable as local producers have forecast.
"Just imagine how expensive and difficult it can be for a solar-cell maker to obtain raw materials from foreign suppliers alone, to say nothing of the related technologies, skilled labor or buyers of the solar power you generate," explained the expert.
The global supply shortage of polysilicon--an essential raw material in the manufacturing of solar cells for panels--has caused prices of the product to skyrocket, with average contracts for securing long-term supplies more than doubling to US$70 per kilogram since 2004.
"Despite these hurdles, it is still commendable for the 14 local solar-cell suppliers to strive to have solar energy supplant nuclear power, hence making Taiwan nuke-free. I just hope all the suppliers of solar cells in Taiwan give the project a great deal of thought before they proceed with further investment," he added.
Write to Liu King-pong at kpliu@mail.gio.gov.tw