Hyundai Heavy to reduce solar exposure
World’s largest shipbuilder in talks with SK, POSCO about sale of $270 mil. plant
By Kim Yoo-chul
The prolonged downturn in the global solar market is proving too much for Hyundai Heavy Industries (HHI), Korea’s biggest solar business operator, to endure.
HHI has decided to vastly restructure its solar business after scrapping plans to build two solar photovoltaic power plants roughly valued at $700 million in Arizona, the United States, said Hyundai officials.
``The market demand is way below expectations. The feasibility is lost,’’ a source told The Korea Times, Tuesday.
The restructuring will come after the shipbuilder has already downsized its investment by over 40 percent.
Part of the restructuring involves a discounted sale of a production facility for crystalline silicon, a raw material for solar cells.
``Hyundai is talking to SK Energy and POSCO, separately, about selling its equipment for crystalline silicon production including module plants located in Eumseong, a provincial city southwest of Seoul. The so-called `No. 1' there are worth about $270 million,’’ said the source, asking not to be named.
Chipmaker SK-Hynix is interested because of the duality of the involved technology as solar-cell manufacturing technology is pretty much the same as making semiconductors.
``POSCO Chairman Chung Joon-yang met with HHI executives to discuss the purchase,’’ said the source. A spokesman from POSCO wasn’t available for comment, while SK Energy representatives declined to confirm this.
Hyundai has three solar panel plants in Eumseong with a combined capacity reaching 600 megawatts. HHI had launched the renewable energy division as a new growth engine.
Park Joon-soo, a PR official for HHI, said that the No. 1 factory has been closed with the utilization rates of the No. 2 and No. 3 plants at 50 percent as of the end of January this year.
``The restructuring is inevitable because of low profits,’’ Park said by telephone.
HHI is the latest Korean technology giant to restructure its solar business. Affiliates of Samsung Group and LG Group are also downsizing their solar divisions.
``The market for crystalline silicon-based solar cells is dominated by Chinese companies. It’s difficult for Koreans to penetrate,’’ he said.
The global solar business will see a consolidation that’s already taking place in the global memory chip sector. HHI’s decision to restructure its solar business is welcomed by stock investors.
But it’s very unlikely that the firm will completely fold its solar business as the shipbuilder is still investing in the more profitable and advanced solar technology of thin film.
``HHI will continue strengthening capabilities in thin-film solar assets to put the ailing solar business on the right track in the shortest time,’’ according to Park said.
He said the project to build another solar panel facility to produce thin film-based solar panels is still effective despite the ongoing bearish market.
HHI had entered a joint venture with French company Saint-Gobain to launch Hyundai Avancis in Ochang, North Chungcheong Province, to manufacture crystalline silicon-based solar panels in South Korea.