Alternative Energy Investor Discussions

[ckessel]

I know this is off thread topic but i wanted to respond to this. BUY TODAY!!! Hynix (#1 competitor to MU) is talking about building a new fab which is why the stock is down big today. This is a usual market overreaction and a great buying opportunity.

Not going to disagree since I don't follow the semiconductor industry, but I'm curious why now? Micron has been around for a very long time (it's my town, Beaverton Oregon), plugging along for a few decades. Though I'm guessing only recently public since the stock price history doesn't go back very far.

The stock is up big already this year. This particular day certain seems like a correction worth buying if you're in the market, but what's fundamentally changed for Micron?

 

[Convert2013]

Not going to disagree since I don't follow the semiconductor industry, but I'm curious why now? Micron has been around for a very long time (it's my town, Beaverton Oregon), plugging along for a few decades. Though I'm guessing only recently public since the stock price history doesn't go back very far.

The stock is up big already this year. This particular day certain seems like a correction worth buying if you're in the market, but what's fundamentally changed for Micron?

Yes Micron has been around for some time. I took a look at their earnings history last night and it was all red until very recently. So they just started making money after a long time. The next two quarters show (from my brokerage account) exponential earnings growth, and forward PE for 2014 is 10, so a potential 2-bagger if they keep meet/beat earnings. But will see.

 

[fjm9898]

I have likened the memory and solar industries before in this thread in the cyclical nature. Just like the solar industry, the memory industry was full of players which drove costs so low companies were losing money hand over fist. Many were sold off or disbanded (intel's memory) And in japan they were all combined into Elpida. Solar did much of the same, prices went due to over supply so companies had to sell at a loss and many died off. Only memory did this cycle a few times and now there are only 3 left. Still many solar producers left, which could cause another huge low in solar if demand doesnt stay high and supply ramps up to high. Elpida still went belly up then Micron bought them for pennies on the dollar, which was the reason for their huge run up this year. When you literally double your capacity (and add $1-3EPS, still waiting on the dust to settle from the merger to know exactly) with buying out a company, which will pay for itself in 5 years, your stock is going to go places. Memory prices have finally stabilized and stabilized high since really there are only two players left, Hynix and Micron. Samsung is the 3rd and makes alot too but they consume so much of their own product there is not much left to sell, so really if your a computer or smart phone maker, you go to either Hynix or Micron now.

 

[sleepyhead]

I have likened the memory and solar industries before in this thread in the cyclical nature. Just like the solar industry, the memory industry was full of players which drove costs so low companies were losing money hand over fist. Many were sold off or disbanded (intel's memory) And in japan they were all combined into Elpida. Solar did much of the same, prices went due to over supply so companies had to sell at a loss and many died off. Only memory did this cycle a few times and now there are only 3 left. Still many solar producers left, which could cause another huge low in solar if demand doesnt stay high and supply ramps up to high. Elpida still went belly up then Micron bought them for pennies on the dollar, which was the reason for their huge run up this year. When you literally double your capacity (and add $1-3EPS, still waiting on the dust to settle from the merger to know exactly) with buying out a company, which will pay for itself in 5 years, your stock is going to go places. Memory prices have finally stabilized and stabilized high since really there are only two players left, Hynix and Micron. Samsung is the 3rd and makes alot too but they consume so much of their own product there is not much left to sell, so really if your a computer or smart phone maker, you go to either Hynix or Micron now.

Great analysis.

Solar is growing at a great pace of more than 20% per year globally and I think that the growth will become exponential from here. I don't think that the solar industry will follow that same path as the memory industry. There will be a lot more than 3 players in solar. There will be dozens of profitable companies.

Can you please provide us some data on why the memory industry consolidated into 3 players? I understand oversupply, but how fast was demand growing? Are we talking 10% per year, more, less? Just curious what lead to the consolidation to only 3 players. Also how many were there initially, tens, hundreds? Do you think solar will follow the same boom and bust cycles and eventually consolidate to a handful of players in a couple of decades?

 

[Convert2013]

I have likened the memory and solar industries before in this thread in the cyclical nature. Just like the solar industry, the memory industry was full of players which drove costs so low companies were losing money hand over fist. Many were sold off or disbanded (intel's memory) And in japan they were all combined into Elpida. Solar did much of the same, prices went due to over supply so companies had to sell at a loss and many died off. Only memory did this cycle a few times and now there are only 3 left. Still many solar producers left, which could cause another huge low in solar if demand doesnt stay high and supply ramps up to high. Elpida still went belly up then Micron bought them for pennies on the dollar, which was the reason for their huge run up this year. When you literally double your capacity (and add $1-3EPS, still waiting on the dust to settle from the merger to know exactly) with buying out a company, which will pay for itself in 5 years, your stock is going to go places. Memory prices have finally stabilized and stabilized high since really there are only two players left, Hynix and Micron. Samsung is the 3rd and makes alot too but they consume so much of their own product there is not much left to sell, so really if your a computer or smart phone maker, you go to either Hynix or Micron now.

Agree. Solar will consolidate. There are too many of them and its turning out to be a global business, not a local one like current Utilities. What will be interesting to see is how quickly that happens. My guess is the companies that can get profitable quickest will be able to stay ahead by investing heavily in R&D and produce better products, and as long as they can execute well (good management) they will be able to scale. Sunpower has gotta be in that list.

 

[fjm9898]

Sleepy, My knowledge of the history of the memory/chip industry is more due to the fact i have been a long time consumer and worker in the industry. So i may not have exact numbers to explain my analysis as to why exactly all companies went under but i will do my best. I believe there are several main factors as to why Memory ran into the hard ships it did. Oversupply with slowing demand, Smaller companies could not complete with the big players R&D spending, and lawsuit.

During the tech boom of the late 80s early 90s there was a huge demand at the time and the technology was crude at best by today's standards. Wafer sizes were small and the node sizes were very large (meaning chips were big and the there fore more wafers were needed to produce chips). It look alot of production to cover the needs sicne the growth was there and tech was at small memory sizes. A few Companies like Intel, had spread themselves to thin and could not put in the R&D to keep up across the entire tech industry. I believe Intel pulled out due to the foresight of over supply and to focus their R&D on CPUs to try and place themselves as the #1 player (CPU makers had a similar but yet less drastic history back in the day, but Intel purely stomped out or bought the competition, leaving only AMD left in the PC space) Micron (with possible help from Intel) was able to put alot of R&D forward and keep on the forefront of the tech. RAMBUS (linked with Samsung back in the day) lost out due to being squeezed out either by Intel or a secrete Intel/Micron venture and tech was turned away from RAMBUS style systems (although, personally i think RAMBUS had the better tech at the time) Intel Forced PCs into DRAM and AMD had to fallow suite as RAMBUS was left in the dark.

In the late 90s the first wave of break downs started, Demand was slowing and companies couldnt keep up with the tech advancements of the major corporations and shifted gears to other components, smaller companies were bought up by the big guys like Intel or shifted gears to make other chips. Nothing to extreme here, alot of money being made and spent by the big guys and they swallowed up the smaller ones. Here is a graph to show you how in the late 90s PC sales started to pare back and continued till current date. This is that slow in growth which caused an over supply.

In the early 2000s things got interesting. Elpida was created from a NEC/Hitachi merger (not sure if it was financial bust that forced the hand or a takeover) and then they bought Mitsubishi's memory division as they pulled out of the sector in the early 2000s, once again i am not sure why, either they spread them selves to thin and wanted to get out of there was some other reason. The real story of the early 2000s, right before Mitsubishi sold to Elpida. During that time PCs were very expensive and major PC makers, Dell, Gateway, Packard Bell(who became HP) were having a hard time getting consumers to pony up the cash. They claimed that the memory prices were to high and so started and anti-trust suit around an international price fixing conspiracy. Micron, Elpida, Infineon, Hynix and Samsung all were fined but Micron was let of the hook for cooperation. I think the fines were pretty hefty, like $150million.

Over time the margins got destroyed and the companies were spending more in R&D to stay in front then they were bringing. Infineon couldnt keep up and pulled out of memory and focused on other parts of the chip sector, like many memory makers before them. Elpida started to feel the pain and sold part off to Kingston, then did a huge stock offering as well as taking a government loan. With the economy bust in 2009 at the same time this took Elpida out and Micron worked on buying them for a while.

Why Micron was in bad shape was that they pulled an Intel/AMD and focused on PCs as the iphone and tablets started to destroy PCs sales growth Micron had an oversupply and suffered along with the others left. This is also what drove Elpida into the dumps. Samsung was able to see the smartphone/tablet shift and changed focus to mobile memory, which is why Apple, Samsung's largest competitor, was a Samsung customer for some time until Elpida was able to shift gears, to little to late and Elpida went under and Micron, buying Elpida, bought the Apple contract with Elpida. Micron has also been able to transition their extra DRAM fab in Singapore to NAND memory.

I will willingly admit i dont know much about Hynix, but this new fab they are putting online is a joke of an impact to Micron, its purely because Hynix was broke as well and they too are finally getting out of the hole and have money to build a new one to toss their stone age fab out, so its not real new capacity coming online. Micron now has capacity to match Hynix and Samsung with the Elpida buyout and newer, better fabs as well as leading edge tech. CPUs have fallen to only 3 players and so has memory. Now the market will stabilize and they can start turning profits again. Just who ever stays on the leading edge and can spend the R&D will turn into the next Intel and who cant will become AMD. Samsung will be the dark horse and play the role of ARM/Qualcomm, making their own niche.

Now what this has to do with solar, I dont expect a anti trust suit to kill of solar companies, but i do expect the lack of money, slowing R&D as it did in the 90s in memory to kill off the small players. Although it will happen slightly differently then the memory sector. Many of the Memory small timers purely couldnt keep up and were bought out. In solars we had the huge pullback and oversupply that already happened (Memory in the late 2000s due to PCs dying off) So many companies are struggling with Debt.
As i said a long time about in my post linking solars to memory, I see the big guys that got out of debt early to start pulling away and killing off the smaller players purely on R&D. Since oversupply is not an issue now, the smaller guys can keep fighting to dig themselves out of debt, but they need to do it fast to keep up on the R&D side. If SPWR, and others start blowing loads on R&D and another oversupply wave hits, people are going to buy the better panels if they are buying panels. As you said sleepy, this probably wont happen for some time as the demand is there and will probably only grow. But i would expect to still see the debt crush some of the smaller guys. This is were i worry about SOL, HSOL, and YGE if they are not careful. YGE has tech but the debt is massive. SOL needed 20million to try and get the phase 1 plant going, which is a small amount of money and then failed. They will need many more $20millions in R&D to keep up.

Right now with high demand, playing the small guys is fine as speculative plays as with the demand being high it can help support them. But if demand slows they they might not have enough left in the tank to survive another slow period and the guys on the leading edge of technology with a good balance sheet will crush them.

 

[InTheShadows]

For the most part the consolidation of solar panel manufacturers happened already. At SPI-10 there were hundreds of panel manufacturers. They are for the most part gone now. Remember Evergreen, BP Solar, Schott, day4, ningbo, suntech? The list is way too long.

If you would like to see the database of all known solar panel manufacturers go to SolarHub - Welcome to SolarHub, click on panels then click in the drop down for manufacturers. There has to be at least 1000 there. There are probably only 20-30 manufacturers now, and that is including ones I would never consider using.

 

[fjm9898]

Sleepy, you have any concerns about JASO lagging in this recovery? Its moving up but not at the pace of the rest is seems.

 

[sleepyhead]

Sleepy, you have any concerns about JASO lagging in this recovery? Its moving up but not at the pace of the rest is seems.

I don't see it lagging. If you look at the chart from Dec. 5 (the day of SOL earnings) then you will see that JASO, YGE, TSL, JKS have all moved exactly the same amount; only CSIQ is leading but not by much:

http://finance.yahoo.com/echarts?s=...on;ohlcvalues=0;logscale=off;source=undefined;

I am not worried at all about JASO. I think they are in a very good place right now. My only concern is that things don't work out as well as I am expecting and the stock doesn't double in 2014. But it is priced so low that if the company can run at break even in 2014, the stock will not go much lower from here.

I like CSIQ the most, then JKS, but JASO has potential for highest reward if everything goes right for everyone. It is significantly lower risk than SOL, but those guys essentially lied to shareholders. So unless JASO has some skeletons in the closet, I see the downside limited.

 

[Convert2013]

I don't see it lagging. If you look at the chart from Dec. 5 (the day of SOL earnings) then you will see that JASO, YGE, TSL, JKS have all moved exactly the same amount; only CSIQ is leading but not by much:

http://finance.yahoo.com/echarts?s=...on;ohlcvalues=0;logscale=off;source=undefined;

I am not worried at all about JASO. I think they are in a very good place right now. My only concern is that things don't work out as well as I am expecting and the stock doesn't double in 2014. But it is priced so low that if the company can run at break even in 2014, the stock will not go much lower from here.

I like CSIQ the most, then JKS, but JASO has potential for highest reward if everything goes right for everyone. It is significantly lower risk than SOL, but those guys essentially lied to shareholders. So unless JASO has some skeletons in the closet, I see the downside limited.

Thanks for the inputs. I don't own any SPWR at this moment, only CSIQ and JKS. Heavy on CSIQ. I will likely get into SPWR very soon. I also have my eye on JASO. FSLR, YGE, SOL, are out of my list but watching somewhat. Buy TSLA can't get a break on these fires. I am considering what to do with my remaining shares in TSLA.. whether to move a good part of it to Solar.

 

[fjm9898]

odd to see Solar for the most part red on another big market day. Same thing happened on the tapper jump day that was only able to help most back to even. NASDAQ up 1.25% and most solars are negative.

Crazy to see SOL just continue to truck along every day with no news. Insiders?

 

[Convert2013]

odd to see Solar for the most part red on another big market day. Same thing happened on the tapper jump day that was only able to help most back to even. NASDAQ up 1.25% and most solars are negative.

Crazy to see SOL just continue to truck along every day with no news. Insiders?

There is news for SOL about winning a new contract although it is from yesterday morning. But yeah it is definitely interesting. CSIQ is selling off harder than most others. Oucchh! Hoping the winners will be traded more like other stocks as Solar gets more mainstream, aka next year. The next earnings series for Chinese solars are so far away-- April 2014. Hopefully we will see more catalysts along the way.

 

[AlMc]

My SOL July 14 options turned 'green' today for the first time since I bought them (right before Q3 ER). Solar giveth and taketh away.:wink:

 

[InTheShadows]

My SOL July 14 options turned 'green' today for the first time since I bought them (right before Q3 ER). Solar giveth and taketh away.:wink:

I bought some apr 14 $4 a few weeks ago, wish I would have bought more now. I only did a little because it was a speculative play.

I have some older ones I bought that are close to green again.

 

[Lessmog]

Well, I just sold my SOL ;-) at a loss. The fast feints they pulled leading up to the QR left a sour aftertaste. All else equal and when possible, I prefer to deal with those who haven't (yet) proven to be robbers.
YMMV as they say in the oily biz.

 

[gene]

Very positive/mixed IHS predictions for solar in 2014:

IMS Research - Top 10 Solar Market Predictions for 2014


Top 10 Solar Market Predictions for 2014
Date: 19 December 2013
This is an IHS News Flash covering the top predictions for the global photovoltaic (PV) market in 2014, from a new white paper issued by the IHS Solar service at information and analytics provider IHS (NYSE: IHS).
“After two years of a punishing downturn, the global solar industry is on the rebound,” said Ash Sharma, senior research director for solar at IHS. “Worldwide PV installations are set to rise by double digits in 2014, solar manufacturing capital spending is recovering, module prices are stabilizing and emerging markets are on the rise. However, challenges remain, including changes in government incentives and policy, an on-going backlash to the rapid rise of renewables and razor-thin margins throughout the solar value chain.”
Below are the top predictions for 2014 from the IHS solar research team.
Double-Digit Growth Yet Again in 2014 as PV Installations Top 40 GW
Despite multiple risks, IHS remains bullish about the development of the PV market in 2014 and firmly believes that global installations will be in the range of 40 to 45 gigawatts (GW), based on a bottom-up analysis of more than 100 countries. Against a backdrop of reduced support and incentives in major European markets, a still-fragile global economy and major trade disputes rocking the industry, the projected level for next year is a remarkable achievement for an industry that just four years ago installed less than half this amount.
PV Energy Storage Moves Beyond Hype in 2014
With the cost of solar energy plunging, demand for PV energy storage systems (PVESS) is booming, with installations set to quadruple in 2014. Worldwide installations of PVESS in 2014 will amount to 753 megawatts (MW), up from 192 MW in 2013. Strong growth will be generated by all three major segments of the market—i.e., residential, commercial and utility-scale PVESS. The largest growth will be in the commercial sector, driven by demand for intelligent electricity-consumption systems in buildings.
PV Module ASP Declines to Keep Margins Slim in 2014
Persisting manufacturing overcapacity for PV modules will result in a 10 percent decline in average selling prices (ASPs) in 2014, prohibiting any further increase in profit margins for suppliers during the year.
2014 to Trigger Technology Upgrades and Return of Capital Spending
IHS predicts global capital spending in 2014 by producers of PV ingots, wafers, cells, modules and polysilicon will rise by a robust 42 percent to reach $3.3 billion. With demand shifting away from the developed solar regions of the United States, the European Union and China, PV manufacturers are gaining interest in running operations in emerging markets, a phenomenon expected to result in new factory openings and boosting local capital spending in areas such as the Middle East, South America and parts of Africa.
Latin America to Install More Than 1 GW of PV Capacity in 2014
In 2014 Latin America will surpass a new milestone in the deployment of PV. IHS forecasts that installations in the region will soar to 1.4 GW in 2014, up from 300 MW in 2013. The majority of additions will take place in Chile and Mexico, countries without any conventional subsidies for PV.
U.S. Net-Energy Metering Debate Continues in 2014
In mid-2013, net-energy metering (NEM) became one of the most contentious issues in the U.S. solar PV industry. However, while states including Arizona, Colorado and California are re-evaluating their NEM policies, the impact of any potential changes on the U.S. distributed PV industry is expected to be negligible in 2014.
Asian PV Inverter Suppliers to Advance in 2014
The rise of solar markets in Japan and China is spurring the rapid growth of the PV inverter business in those countries, boosting market share for domestic suppliers in 2013. Four of the world’s Top 10 inverter suppliers during the first nine months of 2013 were from China or Japan when ranked on a revenue basis, up from two in 2012. As Chinese and Japanese suppliers start to expand their international presence, IHS predicts that those that survive the intense competition will be well-placed to increase their global market share.
China Unlikely to Reach Ambitious Distributed Solar Target in 2014
In November, China’s National Energy Administration (NEA)—a subsidiary of the National Development and Reform Commission (NDRC)—announced huge plans for 12 GW of PV projects in 2014. These consist of 8 GW of distributed PV and 4 GW of ground-mount systems. While the announcement is hugely encouraging for both the Chinese and global PV industry, IHS firmly believes that such an ambitious target for distributed PV installations is not achievable, and the reality is that actual totals will fall far short of this goal.
PV Module Prices Will Continue to Decline Over the Long Term
One solar industry thought leader is positing the theory that PV module prices should stabilize or even increase during the period from 2013 to 2017. IHS begs to disagree. In its own investigation of market pricing trends and price correlation of innovation and learning effects, IHS has concluded that PV module prices will not remain flat in the coming years. Rather, IHS believes that cost and price will decline by more than 40 percent in 2020 compared to 2013.
Unsubsidized PV Market to Take Off in 2014
High electricity prices and the falling cost of PV will allow 700 MW of unsubsidized PV to be developed worldwide in 2014, especially in regions with high irradiation and intense electricity demand.
Historically the PV market has been driven exclusively by government subsidies, including feed-in tariffs (FITs), tax credits and tender schemes. In recent years, these subsidies have been scaled back as PV installations have grown rapidly, because lower system cost has made the original schemes very attractive and also costly to support for 20 years or more.

 

[mershaw2001]

Well, I just sold my SOL ;-) at a loss. The fast feints they pulled leading up to the QR left a sour aftertaste. All else equal and when possible, I prefer to deal with those who haven't (yet) proven to be robbers.
YMMV as they say in the oily biz.

I sold my SOL at a loss too. I am looking for stocks that i can trade around (trade the highs and lows for several years. Any time I don't trust the company it's time to move on

 

[bonaire]

This is not a recommendation if you are sticking with green-only stocks but PSX has been easily tradable due to being linked to the price of WTI oil. Has moved $1 or more daily up and down almost with a regular heartbeat. Options trading on such a stock could be lucrative. I have said this before - use any stock, even oil stocks, to make money. They use profits to buy green stuff like solar, EVs, LED lights and so on.

 

[brg2290]

Very positive/mixed IHS predictions for solar in 2014:

Asian PV Inverter Suppliers to Advance in 2014
The rise of solar markets in Japan and China is spurring the rapid growth of the PV inverter business in those countries, boosting market share for domestic suppliers in 2013. Four of the world’s Top 10 inverter suppliers during the first nine months of 2013 were from China or Japan when ranked on a revenue basis, up from two in 2012. As Chinese and Japanese suppliers start to expand their international presence, IHS predicts that those that survive the intense competition will be well-placed to increase their global market share.

Hello Gene and all.
Who are the 4 inverter suppliers mentioned in the quote above?

 

[Convert2013]

OK guys, all year we have discussed PV manufacturers and have played/invested in them. Time has come to start discussing Energy Storage in more detail to go hand in hand. I am trying to narrow down a top 5 to 10 list of companies which we should consider. 2014 is supposed to be a high growth year and we should start focusing on profitable companies that are already public or will IPO in the near future. Tesla will likely stay invloved in the industry but looking for pure players. Here is an article from Greentech.

Research: 5 Companies Positioned to Succeed in Grid-Scale Energy Storage : Greentech Media