Tokyo Electron is exiting the thin-film PV panel production equipment (PVE) business following a vote by its board of directors on Thursday to withdraw from the sector.
The Japanese electronics and semiconductor company bought Switzerland-based Oerlikon Groups troubled thin film division in 2012 after having distributed Oerlikon Solar products in Asia-Oceania since 2009. Tokyo Electron initially marketed end-to-end manufacturing lines for the production of thin film silicon photovoltaic panels before acquiring Oerlikon Solar outright and making a full-fledged entry into the thin-film silicon PV panel market.
The company continued to struggle in a business environment severely weakened by an oversupply of production equipment. Tokyo Electron said it had up until now maximized efforts to improve the efficiency of converting solar energy to electricity and also reduce costs before finally throwing in the towel.
"Amid uncertainties of a recovery in the market environment, we have decided to scale down our business structure — halt development, production, and sales activities for PV panel production equipment and limit operations to support for equipment already delivered — given continually weak revenues and as we do not expect to recoup our investment further out in this business environment."
Tokyo Electron said it was considering reassigning employees of the thin film unit to other positions within the group. The company’s TEL Solar AG unit is located in St. Gallen, Switzerland, where reductions in personnel are being considered. The group’s Technology Center Tsukuba is in Tsukuba-shi, in Japan’s prefecture of Ibaraki.
The State Chancellery of St. Gallen, meanwhile, has reported that Tel Solar is considering dismissing some 100 employees at its site in Trübsbach. Tokyo Electrons Tel Mechatronics AG division, with about 125 employees, is not affected by the move.
The St. Gallen government said on Thursday that it would try to help save the company, the State Chancellery said on Thursday. Specifically, the government said it would assist in the search for potential investors to take over the unit with the aim of carrying on the business after Tokyo Electrons withdrawal.
The group is scheduled to end its PV business operations at the end of March. It will, however, continue to provide support services after the termination date for equipment that has already been delivered.
Tokyo Electron on Thursday posted an extraordinary loss of JPY 46.7 billion ($455.76 million), JPY 32.6 billion ($318.1 million) of which would be written off as an impairment loss to goodwill and fixed assets related to its PVE business.
The company’s exit from the PVE business comes in the midst of its takeover by California-based semiconductor giant Applied Materials, which is planning to merge its operations with the Japanese group.
The move will create a new leading global semiconductor equipment group valued at approximately $29 billion. The purchase is seen as further consolidation in an industry that has seen decreasing demand for equipment used to prepare silicon for chip fabrication.
The solar business has also been tough for Applied Materials, whose Energy and Environmental Services business which includes solar operations — posted a $30 million operating loss for the fourth quarter last year.