By Kim Yoo-chul
Doubts in solar cell profitability are prompting Samsung Group to review the value of the solar business.
``We are evaluating the business on a `zero-base’,’’ said a Samsung official, asking not to be identified, Tuesday.
Already, a cut of up to 40 percent in our investment plan has been decided, he said. Samsung had planned to invest 6 trillion won for solar batteries by 2020.
``The solar-cell market is reeling from continued oversupply amid aggressive expansion by Chinese cell manufacturers,’’ the official said.
``Samsung is not certain about advancing further with the current level of technology to make the business profitable,’’ said an industry expert.
Solar cells were on the list of its ``next-growth revenue drivers’’ along with secondary batteries for electric vehicles, light-emitting diodes (LED), medical equipment and biopharmaceuticals.
``Samsung’s solar business has so far failed to yield any returns,’’ said a fund manager from a Europe-based investment bank in Seoul.
Samsung SDI, the group’s arm in solar business, suffered from a profit decline by 30 percent in the fourth quarter of last year from a year earlier hit by big losses in its solar batteries.
Samsung sources said Samsung has completely halted the operation of its money-losing crystalline silicon production lines for solar cells.
Samsung Electronics transferred its solar-cell operations to SDI for 160.8 billion won. But an industry expert said, ``Samsung is looking to unload the equipment for crystalline silicon production at a heavy discount,’’ said the industry expert.
Samsung offered STX Solar its equipment located in Giheung, Gyeonggi Province for 36 billion won, but STX is negotiating a greater discount that would bring down the price below 10 billion won, STX officials said.
Hyundai Heavy Industries (HHI), the top-tier solar cell-making company, is also in talks with Samsung. HHI’s Lee Min-young declined to comment.
Samsung was late out the gate in solar cells but dominating as it is, it still wanted to adopt the much profitable thin-film technologies for cell production.
``SDI was planning to invest 2.2 trillion won to further develop the thin-film solar cells,’’ said another Samsung source.
Thin-film technologies cut the amount of material required in creating the active material of solar cell.
Obviously, Samsung has not made final decisions about the future because it is also considering a possible action to beef up the solar business.
``Samsung may want to acquire thin-film solar assets to acquire patent technologies and to put the ailing solar business on the right track in the shortest time,’’ said a Samsung source.
Market analysts expect Samsung may end up holding on to its solar business despite its current business difficulties.
SDI’s sister company Samsung Fine Chemicals agreed to set up a joint venture with the United States-based solar wafer maker MEMC Electronic Materials to produce polysilicon, a key material to make solar panels.
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