Taiwan: Motech Solar
During a trip to the far reaches of western China in 1995, Simon Tsuo had a problem turning on the lights. An electricity failure forced the 57-year-old former researcher from the U.S. National Renewable Energy Laboratory in Colorado to read by candlelight.
Now Tsuo has found a cheap and efficient way of bringing light to rural China -- and the rest of the world. As CEO of Taiwan's Motech Solar, a division of Motech Industries Inc., he is churning out 6-in., wafer-thin photovoltaic solar cell batteries at a significantly lower cost than competitors such as the U.S.'s SunPower Corp. and Japan's Sharp Corp. (SHCAY ) The batteries are used in solar panels and convert light into electricity.
As a result, the seven-year-old startup is sizzling. Motech's sales are expected to grow 97%, to $143 million, for the year ending Dec. 31, according to KGI Securities Co. The company's stock price is up 500% since last October on those stellar returns.
Not bad for a startup that was laughed out of town in the mid-1990s. "People thought I was joking when I went to them about funding," says Tsuo. "I didn't have any business experience or manufacturing expertise, so no venture capitalists would help."
It didn't matter. Tsuo's old school buddy, Cheng Fu-tien, chairman of testing- instrument maker Motech Industries, was looking to bolster his flagging business. Cheng raised $5 million at the local Rotary Club, and production started in 1999, with fewer than 20 employees at Tainan Science Park in southern Taiwan.
In those early days, Tsuo was forced to roll up his sleeves and train engineers himself. He worked exhausting 70-hour weeks. The company's first sales coup came in 2001, when a German company responding to a government green initiative placed a large order. Now Motech Solar boasts 450 engineers and production staff and contributes 95% of Motech Industries' income. Europe has become its biggest market, accounting for 50% of revenues, followed by China's 20% and Japan's 15%.
FIND THE WAFER
So what's next? The company has spent $9 million on a new plant in Tainan and has earmarked a further $9 million to ramp up capacity from 1.6 million solar cell pieces a month earlier this year to 2.5 million by the end of November. And Tsuo says the company may begin producing its own solar panels in a couple of years. It may have to, since competitors like Taiwan's E-TON, a green energy company, and Powerchip Semiconductor Corp., Taiwan's second-largest DRAM chipmaker, are going into the business as well.
Motech's biggest challenge right now is finding enough silicon wafers to jack up its production of solar cells and keep up with demand. Makers of semiconductors are soaking up most of the supply, though more is expected to come online from China by the end of the year. They might have laughed at him once, but Simon Tsuo is riding the green wave all the way to the bank. There's a side benefit, too: If the solar movement spreads far enough, it might help keep those lights lit in western China.
By Matt Kovac in Taipei