Intel made a big leap into the burgeoning clean-tech sector on Monday by creating SpectraWatt, a spinoff company that will manufacture solar cells.
Its investment arm, Intel Capital, is leading a $50 million round in SpectraWatt. Other investors include Goldman Sachs subsidiary Cogentrix Energy, PCG Clean Energy and Technology Fund, and German solar company Solon.
The venture expects to start breaking ground on a facility in the middle of this year in Oregon and start shipping cells made from silicon to solar panel makers by the middle of next year. Andrew Wilson, the former general manager in the Intel New Business Initiatives group, will be SpectraWatt's CEO.
In an interview, Wilson declined to provide specific technical information because the company is still in the process of seeking intellectual property protections.
He did say that the company will focus on improving solar cell efficiency--how well a panel converts light to electricity--as well as cutting the overall cost per watt.
"The solar industry is akin to where the microprocessor industry was in the late 1970s. There is a lot to be figured out and improved," he said.
The company's first plant in Oregon will produce 60 megawatts worth of cells. There will be a ground-breaking in about two months. Wilson said that the company has already secured customers and a supply of polysilicon, which is now in short supply worldwide.
Arvind Sodhani, president of Intel Capital and Intel executive vice president, said in a statement that the chipmaker is eyeing different business opportunities in clean tech. "This is an important investment for Intel Capital in the growing clean-tech sector, and we look forward to working with the company to support its expansion," he said.
In addition to solar, Intel is investing in energy-efficiency processors and data center gear. Intel Capital, meanwhile, has invested in smart-grid company Grid Net, which is using WiMax wireless networks to broker communications between electricity utilities and customers.
Looking for a solar play
The Intel-SpectraWatt deal highlights the deepening cross-over between IT companies and the clean-technology sector.
IBM on Monday announced plans to enter the CIGS solar cell arena by forming a partnership with a Japanese semiconductor equipment maker. It's one of four solar efforts at IBM, which has a companywide green technology initiative.
Hewlett-Packard earlier this month licensed transparent electronics to a solar concentrator start-up, Xtreme Energetics.
Like IBM and HP, Intel has expertise in semiconductor materials and capital-intensive, high-volume manufacturing. Those same skills are required in the solar photovoltaics business, which is growing rapidly--on the order of 40 percent to 50 percent--from soaring demand.
SpectraWatt's Wilson said that Intel's silicon expertise translates in the solar cell industry, even though there are significant differences in the end product.
"It sure looks like solar will be consuming a lot of silicon so it's another thing that we need to understand," he said. "We (also) see a lot of overlap with respect to the research directions of the technology."
Solar expert Travis Bradford, who is president of the Prometheus Institute, said that Intel's move into solar is not surprising, given the rapid growth of solar energy.
"Almost every company in the electronics and semiconductor industry is going to try to figure out how to get into solar--it's going to be that big of an industry," he said.
On the other hand, Intel's processors--the brains of computers--are more sophisticated than solar cells. And in solar, packaging the final goods is very important.
"Compared to the stuff Intel makes, the (solar cell) stuff is pretty dumb," Bradford said. "To be successful long term, you need downstream partners to work on different (solar panel) form factors for different types of installations. Intel doesn't do downstream stuff--they do brains."
Updated at 1:15 p.m. PDT with comments from Bradford and SpectraWatt.