Leaving a legacy
06/01/2007
When former US Vice President Al Gore testified on climate change before US House and Senate committees this spring, he called on the US to take the lead in reducing the greenhouse gases responsible for global warming. Riding a wave of popular support after his film An Inconvenient Truth won the Academy Award for best documentary a few weeks earlier, he exhorted Congress to devise an aggressive plan to cut emissions of carbon dioxide 90% by 2050.
Urging altruism, he cautioned lawmakers that if they failed to act quickly, the day would come when our grandchildren would ask, “What in God’s name were they doing? Didn’t they realize that four times in 15 years the scientific community issued unanimous reports calling upon them to act?” And making the economic case, he argued that although reducing carbon emissions could cause price hikes in the short run, it would save money in the longer term and make the economy stronger, as market forces kicked in and innovators devised technical solutions.
While Congress debates a political response to global warming, leaders in industry are stepping up to the challenge. As high-tech venture capitalist Vinod Khosla noted recently, the “best brains” are no longer working on the next drug or computer product; “they want to work on energy.” What’s more, there appears to be solid corporate support for clean energy, as industry invested more than $12 billion in R&D for the technology last year worldwide, according to the new Cleantech Report from Lux Research.
In the semiconductor industry, a prime example of a company taking a leadership role in developing clean energy is equipment supplier Entegris. Five years ago, when studying emerging markets, the company decided to focus attention on hydrogen fuel cell technology because it provided both the potential for new revenue streams as well as the chance to “leave a legacy of fostering energy independence and environmental responsibility.” As the company’s chief technology and innovation officer John Goodman explains, although it’s currently difficult to make money in fuel cells, since many are still in the prototype stage, Entegris remains enthusiastic about the business potential of clean energy technologies such as fuel cells, as oil prices continue to soar (see “Entegris’s emerging market venture-five years later,” WaferNEWS, March 19, 2007). In fact, John Doerr, a partner at VC firm Kleiner Perkins Caufield & Byers, recently proclaimed that cleantech will be “the largest economic opportunity of the 21st century.”
Perhaps the highest-profile case in the semiconductor industry is the solar energy initiative from Applied Materials, which announced last year that it was entering the photovoltaic (PV) equipment market, citing both altruistic and economic motives. As CEO Mike Splinter noted, Applied would leverage its expertise in semiconductor processing technologies to drive down the cost of solar modules and “improve people’s lives through cleaner, more affordable energy.” At the same time, Splinter asserted that the solar industry presented the best opportunity for new market growth, estimating that PV manufacturing equipment revenues would triple from about $1 billion today to more than $3 billion by 2010(see “Applied sees sparkling growth with solar plans,” WaferNEWS, September 18, 2006). He predicted that Applied would capture between 15%-20% of the market and grow a business that would be profitable at $500 million, a forecast that Bank of America analysts have since called “extremely conservative,” projecting that Applied’s solar contracts could generate three to four times the company’s PV revenue forecast for the rest of the decade.
Building on its commitment to develop PV equipment, Applied recently announced it would install some 2.3MW of solar power generation capability at its research campus in Sunnyvale, CA. Scheduled to go online next year, it would become the largest solar panel system in an existing corporate facility in the US, outpacing former solar bellwethers Google, which announced plans last October to build a 1.6MW solar-rooftop system at its Silicon Valley headquarters, and Microsoft, which on Earth Day last year switched on a 480KW solar system at its Mountain View campus.
Over the past 50 years, the semiconductor industry, like no other in history, has demonstrated an ability to implement unparalleled technological innovations at ever lower costs. If more of our leading companies step forward to apply their expertise toward developing clean energy technology, they stand to create an opportunity not only to exapnd revenues, but also to leave behind a legacy that would make our grandchildren proud.
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Phil LoPiccolo
Editor-in-Chief