FYI,

"Forget Computers. Here Comes the Sun"
New York Times
http://www.nytimes.com/2006/04/14/business/14solar.html?
ex=1302667200&en=75ec5ae4575c4968&ei=5089&partner=rssyahoo&emc=rss

: T. J. Rodgers is surrounded by a sea of silicon wafers on the roof
: of his company's headquarters in a Silicon Valley industrial park.

: No, not the ones that Mr. Rodgers, who founded Cypress
: Semiconductor in 1982, used to make high-speed computer memories
: or the newer specialized chips that go into iPods and high-end
: Mercedes-Benzes. These wafers are soaking up the sun's rays and
: turning them into electricity.

: Mr. Rodgers has plenty of motivation to keep an eye on his roof.
: The growth of his company may soon depend on SunPower, a small
: subsidiary that employs the six-inch-square silicon wafers to make
: a more efficient solar cell.

: The contrast between the two uses of silicon could not be more
: pronounced. As it turns out, the fledgling solar-cell industry
: uses just about as many silicon wafers as the chip industry does,
: but the resemblance ends there.

: Today, solar cells are a tiny niche in the energy business
: — rapidly expanding to be sure, but without the potential for
: exponential gains in performance and falling costs that are
: hallmarks of the computer world.

: Indeed, the solar-cell industry is reliant upon government
: subsidies, to the consternation of Mr. Rodgers, an outspoken
: libertarian.

: "The culture that got built is what I call a grant culture," he
: said. "They're all pitching to the U.S. government, looking for
: funding."

: Such criticism aside, the subsidies are in place, both in the
: United States and Europe, and Mr. Rodgers is ideally positioned to
: capitalize on the government support he has long railed against.
: "I can make a good profit for my shareholders," he said, "and
: provide a lot of good eco-stuff to the world as well."

: The paradox is that Mr. Rodgers, 58, who has long been a free-
: market iconoclast, even by the tough-guy standards of the valley's
: chip industry, may end up striking pay dirt by moving from the
: cutthroat world of computer processing power to the more sensitive
: realm of solar power.

: At the same time, by marrying the silicon-based technology of
: computer chip making with the ability to produce photoelectric
: cells more effectively from the same raw material, he is infusing
: the solar industry with fresh energy.

: Cypress owns 85 percent of SunPower, which went public in
: November. Cypress is valued near $2.5 billion, with its stock
: trading at $17.24. SunPower's capitalization is about
: $2.38 billion; since its offering, its stock has risen from $24.42
: to a closing high of $44.07 on March 1. This suggests that much of
: the value of Cypress these days comes from SunPower.

: "T. J. found an industry that had been around for 30 years but now
: is showing new opportunities."

: "Well, I'm about to go out of business," replied Richard Swanson,
: an electrical engineer who had founded SunPower to make a highly
: efficient solar-power cell. The company had some success in
: specialized applications, but with energy prices relatively low in
: the early 2000's, the consumer market had not developed as he had
: hoped.

: "We've been on the edge, and I can't cut it anymore," Mr. Rodgers
: recalled Mr. Swanson telling him. He was about to lay off half his
: work force of 40 people.

: At the time, his own chip business was not exactly shining. In the
: previous three years, he had pushed Cypress into niche markets for
: the communications industry. While those markets were still
: growing, the dot-com collapse in 2000 had undermined any hope that
: Cypress would become a major power in the data communications
: world.

: On impulse, Mr. Rodgers wrote a $750,000 personal check to buy the
: company and then spent the next 15 months trying to overcome the
: skepticism of his board that SunPower wasn't "strategically
: aligned" with the rest of Cypress's business.

: A scientist by training, Mr. Rodgers is also a gambler. And while
: the solar-cell industry appealed to his technical background, it
: also meshed well with his experience in the semiconductor market,
: where he has long tried to succeed by finding commodity chip
: markets that would allow Cypress to eke out a sustainable edge.

: "One thing I will say about T. J. is that he has a nose for what's
: next," said Andrew Kessler, a longtime Silicon Valley financial
: analyst. "With his communications business he was late; here in
: solar he's early."

: A fixture on the Silicon Valley scene since he left Advanced Micro
: Devices to found Cypress Semiconductor in 1982, Mr. Rodgers can
: swing from bombastic to modest and back again in the space of
: adjoining sentences. But after three decades of warring with the
: vicious up and down cycles of the semiconductor industry, he is
: now a little more rueful about his past pronouncements.

: Nuclear power will inevitably be part of the nation's energy
: future, he reasons, but solar will play an increasingly
: significant role as well.

: For Mr. Rodgers, that is the beauty of the six-inch squares of
: silicon that are colored black to absorb the sun's radiation.
: SunPower is on track to gain the ability to make about 35 million
: wafers a year by the end of 2006, enough to produce 100 million
: watts of solar power annually.

: That should give SunPower an important stake in a market that is
: expanding at a 31 percent compound annual rate.

: After years of promise, the market for solar power is finally
: taking off, with annual demand expected to increase to as much as
: 2,500 megawatts by the end of 2008, from about 1,000 megawatts now
: (which is the size of a large nuclear power plant).

: Mr. Rodgers argues that his SunPower subsidiary has a crucial
: advantage over both larger and smaller competitors. While most of
: the industry has a conversion efficiency of around 14 percent, the
: SunPower photovoltaic cell will reach 21 percent, a 50 percent
: advantage that translates into both cost and performance leads for
: the company.

: He will need that performance, because increasing demand will lead
: to more efficient solar cells from larger competitors like the
: Japanese manufacturing giant Sharp.

: There are other hurdles to overcome as well. Producing 35 million
: silicon wafers requires more than 700 tons of silicon. Already,
: the simultaneous booms in the computer chip and solar-cell
: industries have combined to produce a global supply shortage of
: crystalline polysilicon, a material that is forged into tubular
: ingots and then sliced into thin wafers to make both
: fingernail-size silicon chips and palm-size wafers.

: "We have contracts signed for 2006, but yes, we're worried," he
: said. "We expect the general market will loosen up in 2008, so
: we've got a couple of years when we've got to wheel and deal to
: make sure we get it."

: But even as Mr. Rodgers has become enthusiastic about one of the
: environmental movement's favorite technologies, he remains his
: prickly self, independent of the cause.

Mark Reiff