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Silicon wafer maker agrees to deal with big customer

The silicon wafer manufacturer that is planning to build a factory in Genesee County has lined up a big customer.

The manufacturer, 1366 Technologies, has signed a deal with a South Korean solar panel producer, Hanwha Q Cells that will help the Massachusetts company ramp up production at the $700 million factory in the Town of Alabama that state officials say could ultimately bring 1,000 jobs to the area.

The agreement – the company’s biggest ever – calls for 1366 Technologies to supply Hanwha Q with enough silicon wafers to produce solar modules with a combined generating capacity of 700 megawatts over a five-year period.

The company previously said that it has lined up commitments from solar panel producers to buy 60 percent of the factory’s output. The deal with Hanwha Q, which hinges on 1366 Technologies meeting criteria regarding the qualifications of its silicon wafers and the timing of their delivery, would solidify that backlog of commitments and could help the company ramp up production at the Genesee County factory, which is expected to open next year.

1366 Technologies is developing methods that it believes will allow the company to produce silicon wafers – the basic ingredient of solar cells – at half the cost of traditional methods once its 130,000-square-foot factory begins operating next year.

The company’s process creates wafers directly from molten silicon, using a method that requires a single machine and greatly reduces the amount of waste created. It also uses just a third of the energy required by conventional techniques.

In contrast, conventional methods of making silicon wafers melt the silicon into ingots, which then are cut into blocks and then sawed into thin wafers in a process that requires 12 different machines and can take the better part of a week, he said. Along the way, as much as half of the silicon is wasted.

The agreement is “a significant milestone for our business,” said Frank van Mierlo, CEO of 1366 Technologies. “It further demonstrates the compelling capabilities of the Direct Wafer technology and the readiness of this innovation.”

Hanwha Q invested in 1366 Technologies during a round of fundraising by the company in 2010. Last year, the companies formed a strategic partnership to develop and commercialize 1366 Technologies’ wafer technology, which was used in Hanwha Q panels that achieved a 19 percent efficiency rate last year.

“That’s the beauty of the Direct Wafer process,” said Laureen McGowan Sanderson, a 1366 Technologies spokeswoman. “It not only reinvents how wafers are made; it unleashes the potential for entirely new wafer specifications.”

The Genesee County factory, which will be built by the state, will be the first tenant in the 1,250-acre Western New York Science and Technology Advanced Manufacturing Park, or WNY STAMP. The factory is expected to be developed in phases, with initial production expected to make enough wafers to produce 250 megawatts of solar-powered electricity a year. That phase of the project, which could produce 1 million wafers a week, is expected to cost $100 million.

“We’re expecting that the plant will produce a total of 1,150 megawatts of capacity the first five years,” with production lower in the first year as the factory ramps up, Sanderson said. “So the 700 megawatts is a significant portion of the 1,150-megawatt total.”

If the market develops as 1366 Technologies executives hope, the plant eventually could be expanded to increase its capacity twelvefold, with the ability to produce enough wafers to make solar panels with 3 gigawatts of generating capacity annually.