Glass power: Equipment at Applied Materials’s R&D center in Xi’an, China, processes glass panels 5.7 square meters to make solar cells.
Applied Materials
The company says its future is in energy products for the Chinese market.
The world's biggest supplier of solar-manufacturing equipment has opened a research and development center in China, and its chief technology officer will relocate from Silicon Valley to that country next month. Applied Materials, founded in 1967 as a semiconductor company, has manufactured in China for 25 years, but is expanding its presence to be closer to its customers and develop products suited to the country's urban population.
"We're doing R&D in China because they're becoming a big market whose needs are different from those in the U.S.," says Mark Pinto, Applied Materials's CTO. Going forward, he says, "energy will become the biggest business for the company," and China, not the U.S., "will be the biggest solar market in the world."
Indeed, the move by Applied Materials is just the latest sign that China is rapidly moving to the forefront in adopting renewable energy technologies. China is no model for addressing climate change--its greenhouse-gas emissions are expected to nearly double by 2030. The lion's share of demand for photovoltaics comes from Europe, which accounted for 82 percent of the photovoltaics sold in 2008, according to a report by Solarbuzz. China currently makes up less than 1 percent of the demand for photovoltaics, but its demand for photovoltaics is expected to grow; Beijing aims to produce 20,000 megawatts of solar energy by 2020.
One factor in the move by Applied Materials is that China offers manufacturing incentives that aren't available for solar companies in the U.S. The tax credits in the federal stimulus package that passed in February were one of the first such incentives in a long time, says Pinto. But, he adds, "The location of factories of the kind we make isn't driven by cost." He lists the considerations that led to the company's expansion in China: "Where does the product get consumed, what is the cost of shipping, and what incentives does the government offer?" At the research center in Xi'an, a large city home to many universities, Applied Materials will work with local customers and researchers to develop new products.
Applied Materials, the world's largest maker of semiconductor- and display-manufacturing equipment, entered the solar market in 2006. In doing this, it built on its expertise in equipment for making large films of silicon, the material on which both display circuits and solar cells are based. By 2008, the company became the world's largest photovoltaic-equipment supplier.
A more precise manufacturing method will help as electronics shrink ever smaller.
The U.S. has plenty of the metals that are critical to many green-energy technologies, but engineering and R&D expertise have moved overseas.
"Tunable" windows would let people adjust light and heat levels, but so far it's been hard to make them affordable.
This all just goes to show that countries need cheap energy from fossil fuels initially in order to produce these renewable technologies. It does no good to try and increase the cost of fossil fuels.
It indeed costs energy to manufacture solar panels. The energy pay back period (the time for the solar panel to generate as much energy as was used to manufacture it) is generally in the range of 3-6 years. For CO2 levels this is 4 years.
Stoppato A., Life cycle assessment of photovoltaic electricity generation, Energy 33: 224–232, Elsevier
Just wondering how can one possibly run photovoltaics, when visibility is about 1-2 miles.
http://www.flickr.com/photos/ethnocentrics/213323426/
Not only is visibility limited in NE China, but the H2S concentration is 200 times worse in an area such as Shanghai than in North America (Bell Labs study 2005). Most organic and electronic equipment will corrode quickly in China thus limiting its useful life.
Another consideration to moving to China is their monopoly of rare earth metals (REE) some which are necessary in power production. China as of 2012 will no longer export some REEs but rather, for some equipment, will only sell the Chinese made components containing REEs. Sure it may violate WTO rules, but they hold the US by the leash economically. "Obey and Shut Up!"
Moving all your stuff to China seems to make sense right now. They are building an amazing infrastructure, wages are cheap and they put out more engineers in one year than we do in five.
But these companies overlook some very basic facts. China is run from the top down. America is run from the bottom up (less so now as the federal government keeps assuming more power, but that is another argument).
Schools in the US are locally overseen with a bit of state oversight. They get some funding from the Federal government and are tested by the Fed (No child left behind).
Why am I bringing this up? Easy, China just had a bunch of schools collapse due to the contractors not putting rebar into them to make more money. Then the earthquake comes and hundreds of children die.
This would never happen in the US. Someone would talk to the papers, and there would be to many people on to many levels to bribe to allow it to happen on a large scale. Plus the local politicians would not allow their schools to be unsafe.
To fix this situation, the Chinese lined contractors up and shot them to placate the parents of the dead students.
Poison in baby milk. Same situation.
This is not the way to run a country. Corruption is rampant and the central government is only keeping things moving by threat of prison and firing squad.
This system is not a paper house. But neither is it the incredibility stable and functional US system.
If political stability is lost, of heaven forbid they try and take Taiwan (they want it really bad), there will not be a Senator to petition or influence.
The US investors will be shown the door and all the infrastructure and experience will be set up as a Chinese company.
Thanks for the Billions!
Of course it may not go this way. They may understand the way they have it now is the best formula.
But there is the problem of any non-elected government. Sometimes they believe their own BS and do really stupid things.
If they seized Taiwan or took all the US companies, what would we do? They own 800 Billion of our government bonds and manufacture half the products for our economy.....
This is what we do in case the communists go nuts: we just cancel all our debts to them. They will never see a single cent of those trillions in US bonds. Those represent something like 70% of all of China's savings. They would be really crazy to lose that money.
Then we can also put them under economic embargo. The EU and Japan would join in this.
You would see China's economy just go off a cliff.
But I think they are smarter than that. Why would they choose to go down the crazy road? Makes no sense.
Granted, the US bonds they own are a very good reason not to have open conflict with the US.
They have in many respects hitched their wagon to the US economy with the intent of taking our manufacturing sector.
Our patents only protect the US market; in all other world markets they copy our products and sell the exact same product at half the price.
Their combination of government/corporate stratagizing to break in and take over entire manufacturing markets is working very well.
But we are talking about a closed circle of people running the country.
People who run unarmed students over with tanks instead of talking.
You cannot judge a peoples thought process by your thought process standards.
Doing this is how all wars start.
Just because it would be extremely foolish to go head to head with the US, does not mean they will not do it. $800 million is a lot of bonds, but what is Taiwan worth (Toshiba?)?
China owns about $2 Trillion of our debt, but they also own many resource companies around the world. China already has shown its political power by getting the Obama Administion to cancel a sale to Taiwan of military equipment. The US is becoming less of a market to them than you think. And we can't embargo a country that is the sole provider of so many electronic components.
+about the school's colapsing-then the engineers beibg shot;that goes back to the first -greek-building code that basically said;"if you build a house,and it falls down,killing the owner,the builder would be killed",barbaric-,maybe..-effective?..maybe moreso than what we now have where people get swindeled by unscrupuluis contractors..may we could use that idea on thieves?..you steal-the govt takes ALL your money?!
I don't understand your reasoning. Corporations should not leave the country that has the highest corporate tax rate to go to a country with much better incentives and better, cheaper labor because the cheaper country exocutes baby killers?
We might as well get used to reverse innovation.
This is going to be the wave of the future. Manufacture of Solar panels are not technological marvels as it is fairly labor intensive.The hope for America is cutting edge innovation if we want to remain in the forefront or a very high degree of automation to bring costs on par with outsourcing.
Let us concentrate on what we do best and not find solace in closing our markets.
Why is it that everytime ANY topics involving China always end up in a low-level of ignorance discussion about US versus THEM? If you want to complain about China, travel there first to be able to have relevant opinions.
The topic here is about SOLAR EXPERTISE:
Who's the best in the World regarding electronics? ASIA
Where does the best scientists in the World come from? ASIA
Where is located the largest proportion of the World population? ASIA
So why do you think that Energy-related technology efforts are mostly important in Asia? Because they NEED energy and compared to North America, they do not have the luxury of wasting it all the time.
The "expertise" that is located in North America comes from scientists which are maybe American on their passport but they come from everywhere around the World because in some countries, people have suffered a LOT more and they understood that you need to study and work hard to change the World and make it a better place.
When some foreign technology is transfered in the U.S. and create jobs (cars, electronics, etc.) everyone is happy but OH GOD FORBID when something happens in the other direction!
Give me a break!
Get a book about the World situation in 2010 and get educated.
It is because we have become a nation that attempts to resolve problems we don't understand or want to understand by finger pointing. You can't possibly expect the American public to come up with any better solution to an increasingly modern and competitive global environment than to shout "Job Thieves!!! they are slanty eyed job stealers!!!"
We can gripe all we want about this action by Applied Materials, but in the end, the US faces a losing battle against China in economic terms.
The Chinese have a strategy for getting to No. 1. This includes:
a) Sending most of their talent overseas for the past 20 years to get educated
b) Sending back all the information that they get from their competitors (i.e., enemies)
c) Shut down their borders so that nobody can build anything unless their own people can access the technology.
d) Repeat a-c until the world comes to its knees.
Applied is another in a long list of companies who have jumped ship. It will not end until the US realized that their is an economic war going on between these two countries and that the Chines are playing the US as patsies.
Until the US closes its borders to foreign Chinese researchers and trade, it will suffer the fate of Japan. who has lost its shirt to China a long time ago.
Manufacturing in the United States is in trouble. That's bad news not just for the country's economy but for the future of innovation.
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jmaximus9
86 Comments
Another Sell Out
Is there any American company with any loyalty to this country? I don't think so, thats why we need to go back to import duties. We can't sell in China unless you build there or partner with a Chinese company. We should we be the only country with wide open markets? Open markets have cost us millions of jobs. When will Washington wake up and smell the tea?
Reply
bugmenot2
10 Comments
Re: Another Sell Out
And why should this company have any loyalty to the US? If their markets are in Asia, then it is natural to move production there. If the US was more interested in renewable energy, maybe these companies would also have some interest in staying in the US.
Reply
lasertekk
146 Comments
Re: Another Sell Out
The majority of the market for them is China, but ponder this: Let's turn the table for a moment. They manufacture stuff over there (employing their people) and send it here to be sold. Why shouldn't we do the same in this specific case?
Reply
jpm1u
14 Comments
Re: Another Sell Out
The article clearly stated that the European market is the majority. China is desirable b/c of mfg and operating expenses. Who would want to do mfg is CA anyway? CA takes more than their fair share in taxes and squanders it, as does the Fed. Obama talks a big talk, but the fact is he and his spineless congress cannot create the green jobs they constantly talk about.
Reply
bazz
2 Comments
Re: Another Sell Out
Management in USA is "manage" not future orientated which is "change". - SEE money spent on Lobby at Congress. GM failed because it "manage" past not force / see future. OR no American dream any more - captured by Managers (spin doctors) with no vision.
Westinghouse who made his $$$ in Railway Brakes saw the future with electric motors and made them.
Land saw the future with polarized light.
Modern Managers have Experts with Total Knowledge of PAST who cannot advise about the future because they would have to bet on Low probability of success.
Reply
bazz
2 Comments
Re: Another Sell Out
oops
PROOF
IBM could not see the future in Computers in 1940's
but survived and again in 1970's the future in PCs and lost to Microsoft!!
Any other examples Polaroid with instant photos not digital.
Find your own examples of "Manage" failure!
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