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Who Will Rescue U.S. Green Technology? Asian Conglomerates

Published at: Sep 18, 2011
source: Forbes
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Although U.S. investors have become somewhat skittish about green technology, Asian conglomerates are at the start of what could become an extended shopping spree.

Although U.S. investors have become somewhat skittish about green technology, Asian conglomerates are at the start of what could become an extended shopping spree.

SK Innovation, the largest refiner in South Korea, today announced it would invest $50 million into HelioVolt, an Austin, Texas-based company that has been struggling to bring its copper indium gallium selenide (CIGS) solar cells to the mainstream. HelioVolt has been searching for an acquirer since April, according to various reports. SK Group, the parent company, says it will invest up to $15.6 billion into clean technologies by 2020, including expanding its interests in batteries and silicon.

The announcement is the latest in a series of transactions between large Asian conglomerates and American start ups. Call it a marriage of industrial convenience. Large conglomerates have the capital, factories and customer contacts required to get new technologies like next-generation solar cells to market. These companies also understand how to function on sometimes single digit margins.

 

Many have already unfurled grand plans. Samsung says it will grow its solar manufacturing capacity from 150 megawatts now to 3 gigawatts by 2015, a size that would let it rival established solar specialists like First Solar and Suntech.

Samsung also quietly hired away Steve Fludder, the former head of GE’s Ecomagination group, last year to oversee its energy strategy.

The U.S., meanwhile, still leads the world when it comes to transforming interesting science experiments into a sparkling new products.

As a result, the U.S. increasingly looks like a top-notch science fair to companies hoping to get into this slow-moving, but potentially massive, market.

Back in August, TFG Radiant Group, a large Chinese construction and real estate firm with links to Singaporean investors, announced it would invest up to $450 million into Colorado’s Ascent Solar in a complex transaction that ideally will lead to new factories.

Last year, TSMC, the humongous chip foundry based in Taiwan, invested $50 million into Stion, another CIGS manufacturer, and obtained a license to manufacture Stion-like panels at its factories.

In a similar vein, DuPont in July bought Innovalight, which makes a silicon ink that boosts the efficiency of solar cells. DuPont is not, of course, an Asian conglomerate. But look at Innovalight’s customer base: it is rooted in China, India and South Korea. Innovalight to date has not sold to U.S. customers.

Both Samsung and LG so far have been growing their green businesses organically, but both have also signed licensing deals with U.S. institutions. Samsung invested $15 million into Nanosys, a back-from-the-dead material science company working on LEDs and batteries, last year while LG Chem, LG’s battery group, has licensed technology from Argonne National Labs for the batteries it makes for the Chevy Volt. A host of Japanese companies are working with Los Alamos National Labs on smart grid technologies.

U.S. start ups aren’t the only beneficiaries. In July, Toshiba picked up Landis + Gyr, a Swiss-based maker of smart meters, for $2.3 billion. Panasonic jumped into solar and expanded its market share in lithium ion batteries by buying Sanyo, a Japanese company founded early in the 20th Century by one of Panasonic’s early employees. Panasonic also has stated a goal of becoming number one in green electronics by 2018.

And Asian conglomerates aren’t the only ones shopping either. Europeans love the U.S. too right now. Areva, France’s nuclear power, bought solar thermal vendor Ausra while Total, the French oil giant, bought a controlling stake in SunPower. ABB (Switzerland) and Schneider Electric (France) have bought several billion dollars worth of U.S. companies over the last 18 months.

 

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