MEMC Electronic Materials
|Traded as||NYSE: SUNE|
|Headquarters||St. Peters, Missouri|
|Key people||Ahmad Chatila, President & CEO|
|Products||Polysilicon, Semiconductor Wafers, Solar Wafers, Photovoltaic Plants, Solar Modules, Solar Energy|
|Revenue||US$1.16 billion (2009)|
|Operating income||US$127 million (2009)|
MEMC Electronic Materials changed its name to SunEdison on May 30, 2013 to reflect the company's focus on solar energy. The company is a United States manufacturer of silicon wafers for the semiconductor industry as well as solar wafers and Silvantis(R) Solar PV Modules. Originally established in 1959 as the Monsanto Electronic Materials Company, a business unit of Monsanto Company, the company is based in St. Peters, Missouri. The company solar energy headquarters is located in Belmont, California with offices throughout the world.
Ahmad Chatila is the current President and Chief Executive Officer of MEMC. Mr. Chatila was appointed President and Chief Executive Officer and a member of the Board of Directors of MEMC on March 2, 2009.
Monsanto Electronic Materials Company (MEMC) was established on August 6, 1959, as part of the U.S.-based multinational corporation Monsanto. In the same year MEMC started the production of 19-mm silicon wafers in St. Charles County, Missouri. As one of the first corporations to produce semiconductor wafers, MEMC is considered a pioneer in this field, its innovations becoming industry standard for years. MEMC used the Czochralski process, developed Chemical Mechanical Polishing (CMP) and started production of 1,5-inch-wafers. In 1966 MEMC installed the first reactors for production of EPI-wafers and develops zero-dislocation-crystal-growing.
During the 1970s, MEMC opened a production plant in Kuala Lumpur, Malaysia. Step by step, diameters of wafers were increased to 5 inches. In 1981 MEMC constructed a production and R&D-facility in Japan, specifically in Utsunomiya, as the first non-Japanese corporation. Three years later, the production of 200 mm wafers was started by MEMC on economic scale, with the corporation taking on a pioneering role again.
Change of ownership
High price pressure from Japanese competition led to an ever increasing pressure on MEMC during the 1980s. Despite increasing revenues MEMC had to account for losses for several years, leading to the decision of Monsanto to sell the company. In 1989 MEMC was bought by Dynamite Nobel Silicons (DNS), a subsidy of the German Hüls AG, which itself is part of the German VEBA AG. DNS already operated silicon wafer plants in Merano and Novara, Italy and integrated them within the new MEMC Electronic Materials, Inc. Hüls supported the new subsidy with 50 million USD, mainly used for research and development. MEMC started the production of granular polysilicon in 1991 and as the first company produces 300 mm wafers on a commercial scale in 1991. Four years later MEMC acquired production capacities for granular polysilicon in Pasadena, Texas.
Trading of MEMCs stock at the New York Stock Exchange started after an initial public offering in 1995. VEBA converted part of its stock into 440 million USD, but retained the majority voting rights in the corporation. The cyclical downturn in the semiconductor business hit MEMC hard. In 1998 the company reported a loss of 316 million USD with revenues of 759 million USD. A significant improvement in turnover and earnings figures was achieved in the following years.
In June 2000 VEBA AG, still holding 72% of MEMC, was merged with VIAG to form the new E.ON AG. E.ON wanted to focus on its core businesses and assigns Merrill Lynch to sell MEMC. Merrill was unable to find a buyer until MEMC announced that it was on the verge of illiquidity in the middle of the year. Finally E.ON is able to agree on a deal with the private-equity-company Texas Pacific Group (TPG). MEMC was sold for a symbolic dollar and 150 million USD in credit lines.
By restructuring the debt of MEMC TPG was able to raise its share on the company. TPG conducts cost-cutting measures and cut the number of employees from 7,000 to 4,000. In addition it convinced customers that MEMC will stay in business. The market share of MEMC rises again and by 2002 MEMC reported positive earning figures.
After a significant improvement of key figures, in 2005 TPG reduced its share on MEMC to 34% through a secondary offering. The revenue of this transaction is more than 750 million USD, none of them going to the coffers of MEMC.
Solar market entry
With the boom of the photovoltaic industry MEMC was able to agree on several long-term contracts for delivery of solar wafers. Starting in 2006 a volume of several billion USD is contracted, e.g. with Suntech Power, Tainergy Tech, Gintech Energy or Conergy.
Based on high spot prices these contracts not only guaranteed high delivery volumes at fixed prices, but MEMC was also able to collect significant prepayments. Already in the middle of 2008 the significant drop in prices for solar wafers led to disputes over those long term agreements. MEMC had to cut the deal with Conergy with a volume of 8 billion USD in half. Despite that, Conergy applied to the courts to declare the contract invalid and void. Only in 2010 did both companies agree to renegotiate the deal out of court. MEMC had to agree on a reduction of the sales volume to less than one billion USD as the original contractual conditions would place Conergy in an economic position it could not survive.
In 2009 MEMC and Q-Cells—specialized on construction and operation of photovoltaic plants—found a joint venture to erect a photovoltaic plant with 50 MWp in Straßkirchen, Bavaria. Both partners invested 100 million USD each, in return for a 50% ownership on the project. As planned, the plant was sold to an alternative energy fund of Nordcapital after operations started at the beginning of 2010.
At the end of 2009 MEMC bought SunEdison, a North-American company planning large-scale photovoltaic projects, and financing, constructing and operating them. SunEdison is the largest operator of solar power plants in North America. The company was taken over for 200 million USD, 70 per cent thereof paid in shares of MEMC, 30% in cash. An additional 90 million USD was to be paid depending on target achievement in 2010.
MEMC acquired the California-based solar tech company Solaicx mid-2010. By paying 76 million USD, MEMC got access to the continuous crystal pulling technology of Solaicx, which enabled the production of cheap mono-crystalline solar wafers.
In February 2011 Samsung Fine Chemicals and MEMC announced a 50/50-Joint Venture to build a polysilicon production plant in Ulsan, South-Korea. The plant will have an initial capacity of 10,000 tons per annum.
December 2011 MEMC announced restructuring measures to react on a cyclical downturn in its semiconductor business and a slump in the whole supply chain of photovoltaic modules. A headcount reduction of 1,300 employees (18% of the workforce) and a reduction of capacity for polysilicon and solar wafers was announced. Restructuring charges of 1 billion USD, 180 million USD thereof cash costs was announced.
Since the acquisition of SunEdison MEMC has had three reporting segments.
- Semiconductor Wafers delivers wafers to the electronics industry. Products of MEMC include 300 mm wafers, production capacities allow for 2 million wafers per month. Apart from plants in Asia (Utsunomiya, Japan; Chonan, South Korea; Taisil, Taiwan; Kuala Lumpur and Ipoh, Malaysia) MEMC operates a production facility in Novara, Italy. Production plants in the United States (St. Peters, Missouri and Sherman, Texas) are scheduled to be closed and capacities to be moved to Asia. MEMC produces polished and epitaxial wafers, High Resistivity Wafers and SOI Wafers. Main competition in this segment comes from SUMCO, ShinEtsu, Siltronic and Siltron. The market share of MEMC is roughly 12 per cent.
- Solar Materials: MEMC produces Polysilicon in purities usable in the solar and semiconductor industry in Pasadena, Texas and Merano, Italy. Production capacities equal 10,000 tons per annum, an expansion to 12,500 by the end of 2011 was announced. The material is mainly used for their own following production steps, sales to the spot market occurred between 2006 and 2009. Apart from opportunistic sales of silanes the segment sells mainly solar wafers. As their own productions capacities of 600 MW were not sufficient, MEMC also had tolling partners to produce these wafers.
- SunEdison offers customers access to solar power without financing the individual projects generating the power. SunEdison collects capital from investors and uses it to construct photovoltaic plants (installing MEMC Solar Wafers in some cases). The plants are operated by SunEdison after construction. Investors receive a cash flow from sold solar power, including subsidies from governmental organizations. The solar power is sold to commercial, government, and utility customers.
|Chonan, Korea||polished wafers||80% MEMC, 20% Samsung|
|Hsinchu, Taiwan||polished and epitaxial wafers||MEMC|
|Kuala Lumpur, Malaysia||polished wafers||MEMC|
|Meran, Italy||mono-crystals, polysilicon||MEMC|
|Novara, Italy||polished and epitaxial wafers||MEMC|
|Pasadena, Texas, USA||granular polysilicon, monosilanes, SiF4 gases||MEMC|
|St. Peters, Missouri, USA||100–300 mm wafers||MEMC|
|Utsunomiya, Japan||125–300 mm wafers||MEMC|
- Reference for Business Company History Index
- St. Louis Business Journal "MEMC rescued by TPG" StLouis.bizjournals.com
- Business Wire MEMC TPG Deal Bloomberg Business Wire
- E.ON trennt sich von MEMC E.ON Pressemitteilung (German)
- MEMC Electronic Materials, Inc. Announces Full Exercise of Over-Allotment Option in Secondary Offering Reuters.com
- Conergy-Zocker setzen auf MEMC Befreiungsschlag Der Aktionär (German)
-  SunTech Power Investor Relations
- MEMC Electronic Materials enters 10-year supply contract Industry Week
- MEMC Gintech amend supply deal Cleantech.com
- Conergy and MEMC have come to an agreement Renewable Energy World
-  Conergy feiert Befreiungsschlag - MEMC Streit geloest] Handelsblatt (German)
- Strasskrichen größter Solarpark Deutschlands blog.strom-prinz.de (german)
- Solarfonds 1 Nordcapital (german)
- MEMC acquires solar services leader SunEdison Cleanergy.blogspot.com
- Pressemitteilung SunEdison
- MEMC to acquire Solaicx for 76 million www.smartplanet.com
- Samsung Fine Chemicals and MEMC Sign Polysilicon Joint Venture Agreement www.prnewswire.com
- MEMC Announces Global Restructuring www.memc.com