by Jeanne Lang Jones, Staff Writer, Puget Sound Business Journal
Solar cells and semiconductor chips have a lot in common. There’s enough similarity in how they’re made that a group of Seattle brokers has carved a global niche in selling chip plants to be converted to production of solar cells for the booming alternative-energy industry.
Colliers International’s Advanced Technology Real Estate Group, or ATREG, predicts half of the world’s semiconductor manufacturers will be making solar cells by 2020.
Since it was founded in 1997, ATREG has handled more than $2 billion in sales of chip plants, said Stephen Rothrock, a senior vice president at Colliers. Rothrock is one of two directors, along with Colliers Senior Vice President Doug Barrett.
Over that time, the deals have evolved from straightforward real estate transactions to sales of intellectual property and companies, Rothrock said, as buyers realize work forces could be retrained and equipment adapted for solar cell production.
Already, ATREG is seeing an increase in sales of chip plants to solar companies.
In mid-October, SolarWorld AG, a publicly traded German manufacturer of solar cells, opened the largest solar cell manufacturing plant in North America in a refurbished chip plant in Hillsboro, Ore. The $40 million sale of the former Komatsu chip plant was handled by the parties: sellers Benaroya Co. and Real Property Investors and buyer SolarWorld AG. The 480,000-square-foot manufacturing plant is expected to create 1,000 new jobs.
In a recent report, ATREG noted the sale of three other chip plants to solar wafer manufacturers, including plants in Munich and Frankfurt, Germany, and Tres Cantos, Spain. A fifth sale and conversion is pending. Such purchases are appealing to solar energy companies because they can save money and as much as two years’ time in buying an existing facility rather than building a new one.
Additionally, ATREG has been retained by an undisclosed company interested in doing solar manufacturing.
“They are shopping globally but have a strong desire to be in the U.S.,” said Eric Larsen, a Colliers vice president and member of the ATREG team.
Rothrock said it takes between 12 and 18 months to set up the manufacturing equipment in an existing plant, compared to 18 to 20 months needed simply to obtain permitting for constructing a new plant. And converting from semiconductors to solar panels is not that hard.
“They are sister technologies,” Rothrock said. “It is easier to go from semiconductor manufacturing to solar, which is less sophisticated.”
The trend comes as makers of computerized devices that use chips shut down their plants to outsource their chip manufacturing to chip foundries overseas, while others selling computer memory devices are migrating to newer, more cost-effective equipment. ATREG expects more than 16 of the enormous manufacturing plants to be put up for sale in coming months.
According to the Colliers report, global demand for solar energy will increase 40 percent by 2032 as the technology becomes a more viable alternative source of electricity. Within the next seven years, electricity produced by solar power could be as cheap as that produced by fossil fuels or other forms of energy, according to the June 2008 McKinsey Quarterly report produced by business consultants McKinsey & Co. McKinsey further predicts that solar capacity worldwide will grow between 20 and 40 times its current capacity.
In Phoenix, solar cells are being installed on commercial rooftops, said Larsen.
“There is almost a whole new real estate market in big box stores, but on the roof,” he said.
Larsen expects interest in solar panels will pick up as more companies explore offsetting their carbon footprints or trading carbon credits.
The increased interest in alternative energy sources is expected to boost the $20 billion solar industry to $74 billion in 2017, according to Clean Edge Inc., a research firm in the clean technology market.