Can the U.S. compete in manufacturing?

In the solar industry, there is no quicker way to kick off a heated debate than by uttering those six works. Some, like my colleague Shyam Mehta at GTM Research, argue that China's prowess in volume manufacturing combined with lower costs and government support in access to capital mean that the days of U.S. manufacturing are numbered.

Others, like 1366 Technologies CEO Frank van Mierlo, along with companies like Suniva, Solyndra and Stion, believe that the U.S. can exploit strengths in R&D at the university and national lab level to build a domestic manufacturing footprint. Competing in the solar business revolves around creating a highly complex manufacturing process to produce a commodity product: success to some degree will therefore center around innovations like thinner wafers and quicker module assembly methods that the ultimate buyers may never fully appreciate. In other words, it is not just about the current price of glass. Here's one way to gauge the value of U.S. innovation: companies like Innovalight, Zep Solar and Tigo Energy are linking deals with Chinese manufacturers. (Disclosure: I'm in this camp.)

To help the U.S. gain a foothold, the Department of Energy may try to build a consortium similar to Sematech, according to sources. Back in the '80s, large U.S. semiconductor manufacturers, with the cooperation of the government, collaborated on devising chip manufacturing processes to lower the overall cost of producing parts in the U.S. and to better leverage research. Intel co-founder Robert Noyce headed up the effort. At the time, Japan was going to take over the world, according to various academics and Michael Douglas movies. Nationalism was at a far higher -- and much uglier -- pitch then than now. 

Years later, some would gripe about Sematech, but it worked. The U.S. chip industry, and the domestic semiconductor equipment industry, rebounded by 1994 and has arguably paved the way for the U.S. to remain the leading nation in chips ever since. Intel, Texas Instruments and Micron also still make substantial volumes of semiconductors in the U.S. (Those who take China's side in this debate, though, can point out that both TI and Intel opened their first fabs in China in recent years.)

"There is a lot we can learn from the semiconductor industry," said Bruce McPherson, vice president of research and development at Suniva, who will speak at our Solar Industry Summit 2011, taking place March 14 and 15.  "We think there is an effective way to marry research and academics with manufacturing."

Suniva specializes in solar cells and modules enhanced by, among other techniques, ion implantation. The company earlier this year released cells with 19 percent efficiency. Right now, it concentrates on implanting phosphorous ions but will add boron to the mix in the future. 

Suniva manufactures its products in Georgia and sold out its 2010 capacity. It is currently looking for a location for a 500-megawatt facility.

Can we build factories here or is it folly? What do you think? See you next week. 

Tags: china, chips, crystalline silicon, manufacturing, sematech, solyndra, suniva, thin film