Tuesday, June 17, 2008

Jumping on the solar bandwagon

Semiconductor manufacturing equipment suppliers have been looking at the photovoltaic space for a couple of years now, seeking a way to leverage their expertise as IC growth slows. This week, Intel and IBM joined them.

These are smart companies, so I'm not going to say they're wrong, but I am skeptical. Solar cells make DRAMs look like highly differentiated products, while both Intel and IBM live in the performance-driven microprocessor space. It's not clear to me how they're going to get the margins they need to make the solar business interesting.

(Yes, I know that Japanese companies like Sharp and Sanyo have been in the photovoltaic space for years. Those companies are structured quite differently.)

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