RENEWABLE ENERGY CORPORATION GRANULAR POLYSILICON TECHNOLOGY Tore Torvund, CEO REC Silicon SNEC 2012 (Shanghai, China) May 17, 2012
Disclaimer This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC ASA and REC ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC s businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although REC ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. REC ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither REC ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for SNEC 2012 Silicon Materials Session held in Shanghai, China on May 17, 2012. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. The REC shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act. 2 2012 Copyright REC
REC Silicon: Global Reach Moses Lake WA, USA Butte MT, USA Houston TX, USA Tokyo, Japan Shanghai, China Taipei, Taiwan REC Silicon headquarters Manufacturing Facilities Sales Offices 3 2012 Copyright REC
Overview of Our Polysilicon Plant Our polysilicon plant consists of two separate plants working seamlessly together Silane gas plant Polysilicon plant (Siemens and FBR reactor plant) SILANE GAS PLANT POLYSILICON PLANT 4 2012 Copyright REC
Our Operational Flexibility & Redundancy Butte Moses Lake Silicon II Silicon I Silicon III Silicon IV Silane Silane Silane Silane Silane Loading Siemens FBR Silane Loading Silane gas to TFT, Semi and Solar Polysilicon to Solar and Semi Solar grade Silane gas to TFT, Semi and Solar 5 2012 Copyright REC
FBR: Technology for a Sustainable Future RIGHT HERE AT REC REC Silicon production plant, Moses Lake WA, USA
REC Fluidized Bed Technology (FBR) Reactors Vertical Reactors: High flow rates that allow fluidization Fluidization: Granules balanced by gas flow friction, improved heat transfer YIELD: High yield with proprietary silane process Effluent Gas Significant energy savings Continuous vs. Batch Process Hot Wall vs. Cold Wall Design Demonstrated volume production REC has invested over 10 years of research in Silane-based fluid bed deposition Silane + H2 7 2012 Copyright REC
Consumption KWh/Kg Optimized Siemens vs. FBR CVD ELECTRICITY CONSUMPTION 45 KWh/kg 4.1 KWh/kg 100% 9% Best in Class TCS Siemens* REC FBR** * GT SDR-400 Commercial field data, as of June 2011 ** FBR Actual Q1 2012 8 2012 Copyright REC
REC Silicon FBR Cost Breakdown Electricity Silane 4% Electricity FBR 1% Other Mfg Costs 26% MGS 37% Manufacturing Labor & Support 32% 9 2012 Copyright REC
Cash cost of USD 12.5/kg - Leading cost Position among Polysilicon Companies FBR production target of 15,000 MT in 2012, 40 percent above design capacity Silicon FBR USD/kg SG&A and R&D Depreciation Cash production cost 42 4-39% 16 23 26 4 8 14-13% 23 3 7 12.5 3 7 Q3 10 Q4 11 Q1 12 10 2012 Copyright REC
Significant Growth in REC s FBR Capacity 25 000 REC Silicon Production Capacity by Technology 21 500 20 000 19 000 MT 15 000 13 000 FBR 70% FBR Siemens 10 000 5 000 6 000 6 300 7 500 0 2007 2008 2009 2010 2011 2012 11 2012 REC - Strictly Confidential
FBR Granular Increases Process Efficiency for Wafer Manufacturers Customers About 20 different customers are currently using our Granular products Users have quickly built a strong preference for Granular material Use of Granular in ingot making process The Granular form factor improves productivity used together with chunk polysilicon by increasing crucible charge weight Cost savings Customers confirm significant cost savings achieved by using granular material (blended with chunk) Enables recharge (i.e. replenishing the melt as the ingot is pulled) Maximizes initial crucible charge weight Enables top-off (i.e. adding polysilicon to the crucible after the initial melt to raise the molten silicon level towards the top of the crucible) Increased packing density Enables top-off and recharge Easier to handle 12 2012 Copyright REC
FBR Granular Significantly Increases Productivity Blend Filling Time Improvement vs. 100% Siemens Weight Improvement vs. 100% Siemens 100% Siemens 48.5 mins. N/A N/A 63.8 kg N/A N/A 50% Siemens 50% Granular 28.5 mins. 20.0 mins. 41.2% 82.5 kg 18.7 kg 29.4% 40% improvement in filling time 30% increase in charge weight Note: Same 60 kg. crucible used for all tests. Crucible filled to top, level with crucible edge in all tests. 13 2012 Copyright REC
Future Development RIGHT HERE AT REC REC Silicon materials
C O M M E R C I A L P I L O T S T U D I E S N E X T G E N E R A T I O N Fluid Bed Development History Timeline 1990s 2004 2005 2006 2007 2008 2009 2010 2011 2012 FBR Pilot Reactors 1, 2 & 3 - Feasibility Modeling/Validation/Operability FBR-B Next Generation Reactor - Started-up 3Q 2009 FBR-B Next Generation Reactor - Proof of Enhanced Quality & Operability at Reduced Cost FBR-A Demonstration Reactor - Process Control Key Controls - Design of Experiments Process Optimization - Design Validation Scale Up - Customer Qualification Implementation of FBR-B Developments Plant 3.0 Commercial Process - Design Engineering Construction - Started-up 4Q 2008 Plant 3.0 Commercial Process Continual Process Improvement - 15,000 MT/yr 15 2012 REC - Strictly Confidential
Jan Apr 7/4/2011 7/25/2011 8/15/2011 9/5/2011 9/26/2011 10/17/2011 11/7/2011 11/28/2011 12/19/2011 1/9/2012 1/30/2012 2/20/2012 3/12/2012 4/2/2012 4/23/2012 Polysilicon Supply, Demand & Spot Prices 500 000 80 450 000 400 000 70 350 000 60 300 000 MT 250 000 $/kg 50 200 000 150 000 40 100 000 50 000 30 24,64 0 2011 2012 2013 2014 2015 2016 20 24,48 16 2012 Copyright REC Polysilicon Production Capacity (All Companies) Capacity Top 5 Companies Semi Demand Semi + PV Demand Top 5 Companies: GCL, OCI, HSC, WCH & REC Source: isuppli PV Integrated Market Tracker (Q1 2012) 2011 2012 PV Insights Bloomberg Data as of April 25, 2012. Source: Bloomberg New Energy Finance & PV Insights.
Only ~20,000 MT FBR Polysilicon Available 250000 200000 150000 100000 Market opportunity for flowable polysilicon 50000 Si V Si VI Si VII 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Installed FBR Cpacity Potential Market for FBR Poly (Assuming 50/50 blend ratio) 17 2012 Copyright REC
China is the Main Market for Polysilicon to the Solar Wafer Market Polysilicon Production Japan 7 % Germany 15 % China 40 % Other 5 % USA 3 % Solar Wafer Production Germany 3 % Japan 7 % Taiwan 6 % Korea 14 % USA 24 % China 76 % Source: Solarbuzz 18 2012 Copyright REC
FBR - A Disruptive Polysilicon Technology PRELIMENARY ESTIMATES Current FBR cash cost vs China FBR cash cost (USD/kg)* 12,5 7,9 Q1 2012 cash cost MGS Manufacturing labor & support Other China FBR Cash cost* *) Based on high level preliminary studies 19 2012 Copyright REC
FBR Capex Competitive with Siemens PRELIMENARY ESTIMATES Current FBR capex/kg vs China FBR capex/kg (USD/kg)* 107,0 50,0 Current FBR Optimized capex/kg plant design China location savings China FBR Capex/kg* *) Based on high level preliminary studies 20 2012 Copyright REC
FBR Cost Per Kg* Development USD/kg Deprication Cash cost 35 30 25 32,9 12,9 25,9 20 10,0 19,1 15 10 5 20,0 15,9 6,6 12,5 11,3 3,3 7,9 0 Q1 2010 Q1 2011 Q1 2012 FBR China PRELIMENARY ESTIMATES *Blended cost per kg for all quality grade polysilicon 21 2012 Copyright REC
The STAR Center Silicon Technologies Applications Research Center Location: Shangyu, Zhejiang Province In partnership with Zhejiang Jingsheng M&E Engineering Co. Ltd. Phase 1 scope: Solar Grade CZ puller/s, analytical, FIBC transport, de-dusting & recharge systems Operational by Q4 2012 22 2012 Copyright REC
REC Silicon to Launch an Applications Center in China Aligns REC to market-driven requirements Assists in market acceptance of our products We become a resource not just a source A localized customer support & application facility Sample Activities: Material performance testing Customer training & interaction on product handling, packing, blend, safety, etc. Product development New account qualification 23 2012 Copyright REC
REC Position on a possible trade dispute between China and the US REC Silicon believes that tariffs are NOT in the best interest of the global solar industry Tariffs stifle innovation/add costs to a development industry that needs to reduce costs to compete with traditional power and grow REC Silicon opposes a trade war between the US and China Escalation/retaliatory tariffs damaging to all industry participants The May 17, US Department of Commerce AD tariff is provisional only (final decision to be made late 2012) REC Silicon will continue to work together with other members of the solar industry in the US and China and with the US government with a view to convincing the decision makers in the US to see sense and ensure that the final tariff decision imposes no or negligible tariffs only 24 2012 Copyright REC
Summary: Granular Polysilicon REC Silicon is technology and cash cost leader World-class supplier and by far the largest producer of Granular Polysilicon at the lowest cost Customers Benefit from using Granular Granular Polysilicon helps customers increase productivity and reduce Total Cost of Processes and Production We are a committed supplier of Granular Products Have increased capacity to 15,000MT to deliver to a growing market Developing Silicon research center in Shangyu Driving toward electronic grade quality 25 2012 Copyright REC
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