While we here in the USA were distracted with the final election news, Panasonic was rumored to be making final plans to acquire Sanyo. Both companies have officially denied the reports, but rumors persist a deal will be announced by the end of the week.

Steve Sechrist
Senior Analyst and Editor

Some say the move is a bid aimed at weathering the coming economic storm. This assessment may be accurate but we scratched the surface a bit to see what lay beneath and think the deal goes beyond traditional synergies. Of particular importance - it gives Panasonic a jump-start into the emerging solar power business.

Display makers have made no secret to the advantages flat panel manufacturing technology may bring to this nascent solar power market if the panels can be made efficiently and produce enough power to be effective-and here Sanyo is a leader with products already making money in the category.

For example in October, the company announced a new series of solar panels based on their HIT (Heterojunction with Intrinsic Thin-layer) technology claiming highly efficient cells capable of achieving up to 22.3% light-conversion efficiency, enabling maximum power generation per square foot from 4 inch (104mm) HIT solar cells. Starting in Spring 2009, Sanyo will add more models that will use 5 inch (125mm) HIT solar cells. Sanyo predicts that global output of solar cells will reach 40-45 million kilowatts in 2020, about the same amount of electricity produced by 40 nuclear power plants (sans the glowing waste products–nice.)

While the HIT technology is good, it is expensive and limited in size. That’s why Sanyo invested in new thin-film solar cell production R&D, and that investment has paid off. In September, the company reported a thin film technology for mass-producing solar cells that meet the size, energy conversion efficiency, and low cost requirements for mass production. The technology yields "a nine fold speedup in the film fabrication process," that "…significantly cuts manufacturing costs. Sanyo says it can make the solar cell at a cost of roughly 150 yen per watt - half the cost of typical bulk crystalline solar cells." The Nikkei Net reported in September.

For display makers looking to get into solar cells, the down side was in production techniques, energy yield, and scale, and Sanyo has addressed all three with their new technology. The Nikkei reported that Sanyo confirmed it can be used to mass-produce solar panels as large as 1.1 x 1.4 meters. "Its prototypes have an energy conversion efficiency of 9.84%, which surpasses the 5-8% efficiency of typical thin-film solar cells, with a goal to boost efficiency to 14% and make inexpensive thin-film solar cells for large outdoor solar power systems." The report said.

Sharp Electronics has been at the forefront of solar cell technology and even constructed a second high-tech LCD fab (Kamayama 2) based on not just LCD flat panel manufacturing, but making solar panels as well. For Sharp, thin-film solar cell production is due to kick off at their Sakai factory in Osaka Prefecture in fiscal 2009 (sometime after April-09.)

History teaches that company’s either see the future and catch the next wave of technology development or wade in, after markets are established. There is no doubt in the strong synergies that a Panasonic/Sanyo merge will bring to the existing CE market side of the business. But Sanyo is also very strong in batteries, another area that is ripe for rapid innovation. Add in the solar cell opportunity makes for a triple play - and a prize worth reaching for.

Note for an expanded discussion on this topic see the upcoming December issue of Large Display Report.