Report: Formosa eyeing 40% margins from solar cell packaging films

December 10, 2007 – The Formosa Plastics Group is spending about $4.6M on R&D of ethylene vinyl acetate (EVA) film, a packaging material for solar cell modules, in a bid to develop a high-margin business in a high-growth domestic sector, notes the Taiwan Economic News.

The company is positioning itself to fill a domestic need for materials used in solar cell manufacturing, the paper notes, citing group executives who point out that there’s a $312M market for EVA materials, and Taiwan’s solar cell industry currently imports all that it uses (e.g., DuPont from the US, and Japan’s Hisheet). The company plans to ramp to volume production next year — hoping for 40% gross margins — targeting local solar-cell makers, which consume 20% of global supply of the material, the paper notes.

Work began last year to research packaging materials for solar cell modules, deciding that EVA was a good candidate, and the group also has been working with Taiwan’s Industrial Development Bureau (IDB) of the Ministry of Economic Affairs, according to the paper.

The R&D investment will be put aside for material R&D and a 10-person team. The company already has the EVA production equipment, and can push to volume production by just improving the process and technology — something the Formosa group has demonstrated it can to in other traditional product areas to make a lucrative profit, the paper notes.


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