oerlikon cmd 2008 solar print...thin-film csi total market 101% 69% 73% source: oerlikon cost...

Oerlikon Solar –Solutions for a Solar Powered World

Jeannine Sargent, CEO Oerlikon Solar

Oerlikon Capital Market Days 2008Zurich, September 25-26, 2008

Capital Market Days 2008

Disclaimer

This presentation is based on information currently available tomanagement. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected or projected.


Oerlikon Drive Systems

Oerlikon Coating

Oerlikon Vacuum

Oerlikon Components

Oerlikon Textile

Oerlikon Solar

Oerlikon Solar


Oerlikon Solar

Solar Market

Technology

Strategy

Operational Initiatives & Financials

Summary & Outlook

Solutions for a solar powered world


Oerlikon Solar at a glance

CHF 309m sales in 2007

650 employees worldwide§ 250 global support§ 280 scientist and engineers

20 locations in 11 countries

§ > CHF 23m R&D investment in 2007 § Over 350 living patents


Global footprint and growing

Oerlikon Drive Systems

Oerlikon Coating

Oerlikon Vacuum

Oerlikon Components

Oerlikon Textile

North America§ Sales§ Customer

Support§ Operations (est.

2009)

Europe§ Solar HQ§ Operations§ Pilot Line§ Advanced R&D§ Product Development§ Manufacturing § Customer Support

& Training

§ Sales

§ Operations

§ Pilot Line

§ Technology Center

§ Customer Support & Training

Asia

Oerlikon Solar

Oerlikon Solar


First mover – Milestones

1986 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 2009

Micromorph solar cell (Tandem amor-phous, micro-crystalline)

PV lab at IMT by Prof. Arvind Shah

VHF PECVD deposition technology

Light trapping by TCO & intermediate reflector

Oerlikon founds own R&D lab and enters thin film silicon PV

Oerlikon displays first functional 1.4 m2 a-Si module

Oerlikon presents first micromorph Tandem module ~126W

R&D

Products

Cooperation with Schott Solar on thin film silicon development

First 40 MWpfront end line contract with Ersol

40 MWpequipment contract with Schott Solar

First micromorph®

productionline contract

Contracts for end to end solutions

CMC ramps first Asia line

CMC SOP on Asian line

First R&D equipment delivered to Schott Solar


Our mission

To make solar power economically viable.


Oerlikon Solar

Solar Market

Technology

Strategy


Summary & Outlook



Fast growing global energy demand

108162

5960

124

51

42

44

103

21

20

26

2003

123

23

41

30

2020

US &Canada

NW EuropeJapanChina

Middle EastOther Europe

RussiaRest

Global Energy Demand Total Electricity Production Mix**

China and US/Canada have

the greatest growthin demand

47.5% Coal

23.2%

Gas

18.9%Hydro

7.8%

Oil

2.6%

Other

*Quadrillion British Thermal Units ** for 2005Source:Credit Suisse and McKinsey & Co

Over 2/3rds ofelectricity generated today is from fossil

fuels today


Electricity world market size

8,000

2004

15,000

2050Source: Credit Suisse, November 2007; International Energy outlook

2007, 5/2007, Energy Information Administration, U.S. department of Energy.

Electricity Market

2004

2010

2015

2030

2050

8 TW

9.3 TW

10.5 TW

13 TW

15 TW~150 GWGrowth

per Year!

GW


Fossil fuel price development

Oil Coal

Fossil Natural Gas Estimated plant construction cost, 2004-2007

1970 1980 1990 2000 20070

20

40

60

80

100

USD 120

Oil over $100/Barrel

2003 2004 2005 2006 2007 2008

20

40

60

80

100

120

140USDUSD/metric ton

Coal over USD 120/ton

Source: International Energy outlook 2007, 5/2007, Energy Information Administration, U.S. department of Energy, The Council of the European Union. bbl=Barrel Source: Photon Consulting, 3/2008; Wall Street Journal;

Natural Gas over USD 12/MBTU

Source: Bernstein Research

2,0001,700

1,3001,250

550

3,1002,900

2,2501,800

1,000

IGCCCoalWindCCGT

2007

2004

Nuclear

As Fossil Fuels/Equipment

Costs Rise,Solar Energy/EquipmentCosts are Decreasing!

MBTU*

*MBTU: Metric British Thermal Units ** CCGT:combined cycle gas turbine ***IGCC:Integrated Gasification Combined Cycle

in USD m


Drivers for new energy sources

§ Increased Energy Demand

§ Rising Costs

§ Diminishing Fossil Fuel Resources

§ Environmental Concern and Regulations

§ National Security

Source: IEA, Shell, BMU, EREC

0

50

100

150

200

250

2000A 2010E 2020E 2030E 2040E

CAGR78%

Renewable primary energy supply(Exajoule)


Solar market application growth

Source: Engineering and Science, Prometheus Institute

Grid-Connected Applications are >85% of the PV market

53

25

2007

118

2008 2010 2012

CommercialResidentialUtility

Projected Growth of Grid-Tied PV Installations (GW) accumulated

Commercial

Off-Grid

Residential

Utility


Solar market size

Source:Navigant, Greenpeace, SolarBuzz, Oerlikon

2000 2015

10%

CSP

2%

Thin-film PV

88%

cSI PV

33%

15%CSP

52%

Thin-film PV

cSI PV

Total = USD 1bn Total = USD 150bn

CSP= Concentrated solar power, cSi = Crystaline silicon Thin-film PV = a-Si, ucSi, CdTe, CGIS, CIS


Wide ranging growth scenarios

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

2007 2008 2009 2010 2011

EPIA-12-07/pessimistic

Oerlikon

LBBW 3/08

SolarBuzz/optimistic 2/08

SolarBuzz/realistic 2/08

SolarBuzz/pessimistic 2/08EPIA-12-07/policy driven

PV Module Production Forecasts (GW)

Oerlikon is well positioned for rapid

industry scale-up


Thin-Film is fastest growing PV segment

Accumulated Installed Capacity Thin Film Drivers

0

10

20

30

40

50

2007 2008 2009 2010 2011

T-Fc-Si

GWp

CAGR

Thin-FilmcSiTotal Market

101%69%73%

Source: Oerlikon

§ Cost advantageThin Film reduces the amount of light absorbing material, leading to a reduction of CoO while technology increases efficiency

§ Shorter energy payback periodProduction of thin film modules is less energy intensive

§ Temperature coefficientEnergy harvest: thin-film modules show superior performance at high temperature and in diffuse light conditions


PV thin-film installed equipment opportunity

Source: LBBW, SolarBuzz, Navigant, EPIA and Oerlikon

Growth from USD 1.3bn in 2006 to USD 13bn by 2011

2006 2007 2008 2009 2010 2011

59%

0

10,000

12,000

14,000

2,000

4,000

6,000

8,000

(in USD m)


Market conditions optimism for a-Si on glass

1

2

3

4

5

3rd Generationa-Si

2012E2011E0

2010E2009E2008E

CIGSCdTe

200720062005

Historical and Projected Thin-Film Production

0

2

4

6

8

10

20122011201020082007

Glass (rigid)Metal (flex)Plastic (flex)

2009

Ø Glass will continue to be the dominate substrate

Ø a-Si will continue to be the preferred technology

Source: Prometheus Institute

Projected Use of Substrate in T-F IndustryGW

GW


Oerlikon Solar

Solar Market

Technology

Strategy


Summary & Outlook



Two primary production technologies for solar cells

Technology

CrystallineSilicon

Thin-Films

Substrate Cell Issues

CostSilicon Supply

Large Scale Mfg.Efficiency


Thin-Film solar cell basics

Manufacturing Order

Thin-FilmCell Structure

Thin-FilmSolar Modules

Amorph MicromorphTandem

ThinFilms

GlassLamination

White ReflectorBack Contact

PV LayersFront Contact

Glass

White Reflector


Key process elements needed for scalable thin-film silicon PV manufacturing

LPCVD (TCO)Deposit Contacts

PECVD (KAI)Deposit PV Material

Laser Scribers (LSS)Define Cells


Micromorph process technology– Up to 50% more efficiencyThe principle of light trappingto deliver high performance

TCO Best Commercial TCO

Oerlikon TCO

a-Si/ µ-Si

a-Si:H

µc-Si:H

Amorph

MicromorphTandem

Visible Near IR

•Integral to Micromorph process-High transmission in visible and near IR light spectrums

ØThe goal is to optimize the hazeto better the performance


Oerlikon technology

Advanced process solutions plus high performance cell technology deliver lowest cost per watt

LSS 1200KAI 1200TCO 1200

End-to-end Advanced Manufacturing Lines§ Advanced process integration§ Systems and support

PECVDClean TCO Laser TCO AssemblyLaser Lasera-Si/ µ-Si


The Oerlikon difference: End-to-end support

Delivering fastest time to money

Equipment Move-in

System Installation

Testing & System Quantification

Process Integration

Production Ramp-up

Fab Optimization

§ Coordinated Maintenance

§ Uptime Improvement

§ Quarterly Preventative Maintenance

§ Equipment top condition

§ PM adapt to the production


Oerlikon Solar

Solar Market

Technology

Strategy


Summary & Outlook



The long term impact of grid parity

Source: Deutsche Bank

* Levelized Cost of Electricity is calculated using typical financial considerations and power output de-raters


Achieving grid parity à Lowering the cost per watt

=OerlikonAdvantage

End-to-EndManufacturing

lines

Micromorph High Efficiency

Tandem Solar Cells

x


Path to grid parity – Oerlikon leading technology

0.0

0.5

1.0

2006 2007 2008 2009 2010 2011

GW/p

Fab nominal capacity Module efficiency

CapEx per Watt Cost of ownership

Cap

acity

0%

5%

10%

15%

2006 2007 2008 2009 2010 2011

AmorphMicromorphTandem

Next GenerationThin-Film

2006 2007 2008 2009 2010 2011

$/W

0.5

2.0

4.0

GigaCampus

20112010200820072006

1.5

0.52009

$/Wp

Source: (Calculated with an exchange rate of €1.00 =$1.34)

2007for 20 MWp fabs < 1.5 $/Wp (<1.12€*/Wp)

2010for GWp fabs < 0.7 $/Wp (<0.52€*/Wp)

Grid party1.0


System cost - The module is important, butnot the sole consideration

Module Balance of

System(BOS)

System Cost=+


Balance of system (BOS)

§ Structures for mounting the PV arrays or modules§ Power-conditioning equipment

that adjusts and converts the DC electricity to the proper form and magnitude required by an alternating-current (AC) load.§ The BOS can also include:§ storage devices, such as

batteries, so PV-generated electricity can be used during cloudy days or at night.

§ Mounting Structure§ Inverter§ Cabling§ Land§ Other

BOS consists of:


BOS vs. panel size

BOSCost*

Total System Cost*

USD 5.00


Module price development

2006 2008 2010 2012 2014 2016

c-Si (hi CE / low cost)

CdTe

a-SiCIGS

uc-Si

$2.00

$0.00

$1.00

$3.00

c-Si (average CE)$3.50

$0.5.

$2.50

c-Si (high CE)

$1.50

Source: Deutsche Bank, Oerlikon Solar*BIPV: Building Integrated Photovoltaics

§ c-Si •Historically the dominant technology (GEN 1 technology) but will remain high cost module manufacturer

•Will shift long term to a space constraint niche player.

§ a-Si and uc-Si•Currently beginning production (GEN 2 technology)

•Expected to become long term standard•Best cost-performance profile

§ CIS / CIGS•Challenge to scale into production•Best prospects for flexible substrates and small BIPV

•Still in R&D line

§ CdTe•Limited expansion due to vertical integration of few providers


Oerlikon Solar

Solar Market

Technology

Strategy


Summary & Outlook



Significant business expansion

>480

174135

>1,000

1HY 07

* Solar Sales 07 reported within in Coating Segment

Highlights§ Strong sales and order momentum –

important global customer wins§ Introduction and first contracts signed

for Micromorph technology§ Development of internal and

external supply chain§ Formation of solar segment within

Oerlikon and strengthening of management team

Outlook

§ Accelerated ramp-up of global operations and supply chain to match substantialdemand growth

§ Continuous improvement/innovation of key components

§ Focused completion of offering along the value chain

Sales* (in CHF m)

Order Intake* (in CHF m)2007 > 6502008p > 1000

2HY 07 1HY 08 2HY 08p 2009p

214

13.2% EBIT margin in 1HY 2008


Solar capacity ramp-up to accelerate

> 8 GWTotal

> 5 GW> 1,5 GW>350 MWAsia / RoW

> 1,0 GW

Pipeline 2008/ 2009

>200 MW

Booked2007/ 2008

> 3 GWEurope

Expansionplans2008-2012

§ Pilot line in operation§ Hiring of additional staff ongoing§ Additional PECVD manufacturing

capacity to be installed in 2HY 2008

Truebbachexpansionaccordingto plan

Singaporeramp-upon target

§ Management on site, staffing in progress§ Supply chain qualification ongoing

Furtherexpansionplans

§ Partnership with Flextronics achieved§ Decision on 3rd location in

preparation


Oerlikon primary customer status

40Micromorph®Chint40AmorphousGadir46Micromorph®Tianwei30Micromorph®Next Solar30Micromorph®Pramac

120Micromorph®Sunwell (3)60Micromorph®Sunwell (2)60Micromorph®Auria Solar30Micromorph®Inventux50AmorphousSunwell 40AmorphousErsol40AmorphousSchott

MWSOPMove-InContract Signed

TechnologyCustomer


Oerlikon Solar

Solar Market

Technology

Strategy


Summary & Outlook



Growing solar customer base

l



Thin Film is Solar’s fastest growing segment creating a USD 150bn total Solar Market opportunity by 2015

On track to achieve grid parity by 2010

Proven thin film solutions for high volume solar cell module production

oerlikon cmd 2008 solar print...thin-film csi total market 101% 69% 73% source: oerlikon cost...

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