First Solar Vulnerable to a Tellurium Shortage? 95 comments
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First Solar Inc. (FSLR) is a solar panel manufacturer. Its sole business is production of CdTe based solar panels. Its stock price has rallied about 10 fold since the IPO about a year ago.
I believe FSLR stock is overpriced. Moreover, this company has weak future prospects if you understand the fundamentals of its business. That's because it relies on cadmium telluride as its raw material. Cadmium is extremely toxic, but the mildly toxic tellurium is lethal to FSLR. FSLR is extremely vulnerable due to a possible shortage and price run on tellurium. It could find itself in trouble in a few years due to competing demands on tellurium.
Tellurium, the 52nd element, is extremely rare on earth, rarer even than platinum, the 78th element, according to Web Elements. Tellurium's crust abundance is 1 pbb versus 37 ppb for platinum (pbb is "parts per billion"). Tellurium is mainly produced as a byproduct from the anode slime accumulated during copper refining. But not all copper mines contain significant amounts of tellurium. Chile produces 1/3 of the world's copper but virtually nothing in tellurium. According to USGS and Arizona State Geologist Lee Allison, the world produces anywhere from 160 to 215 metric tons of tellurium a year.
Tellurium was traditionally used in metal alloys and other uses. Demand from emerging new applications, like DVD discs, digital camera, computer flash memory and CPU thermoelectric cooling, among other things, has caused a severe shortage in recent years, and drove the price from below $4 a pound to over $100 in 2006, according to Lee Allison. Jack Lifton on Resource Investor suggested that investors could sense the shortage and start to hoard physical tellurium, adding fuel to the fire and causing a huge tellurium price run.
How much tellurium does FSLR use? They use about 7 grams of cadmium and about 8 grams of tellurium in each of the 2 feet x 4 feet CdTe solar panel. That's roughly 135 metric tons per each 1 giga watt (GW) of products. They have signed a bunch of sales contracts with per watt price fixed and mandated to go down 6.5% yearly, and they are aggressively building new factories and expanding production capacity. After finishing a new factory in Germany, they are building four brand-new factories in Malaysia.
Alright, they have plenty of customers, plenty of sales contracts to keep them busy for five or six years, and Malaysia has plenty of land for them to build new factories. The growth potential looks unlimited. That's why investors bid up FSLR stock price like crazy.
But, where are they going to obtain all the new tellurium supplies needed for future expansion, at a price cheap enough to ensure profitability, and a quantity large enough to keep the new factories running? On Nov. 8, 2007, the CFO publicly commented that "we [FSLR] have identified terawatts levels of tellurium availability." He seemed to have no idea what he was talking about. One terrawatt is 1000 GW. Nowhere on earth does this amount of tellurium even exist underground, let alone available in a secret vault somewhere.
FSLR has a very dark future ahead for itself if a tellurium rush occurs as expected.
Full disclosure: I am short FSLR and I plan to invest in physical tellurium metal ingots.
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This article has 95 comments:
Or search the whole internet. Do a yahoo search of FSLR, you get a quarter million hits. Search FSLR + tellurium, you get only 142. And the bulk of this 142 were related to my own writting about tellurium and FSLR. So the whole earth populace has almost perfectly zero knowledge of FSLR + tellurium.
Please visit my blog to read some of my other writtings on stock fundamentals:
stockology.blogspot.co.../
Also, SWC down 4.7% today.
Also, SWC down 4.7% today.
Lee Allison -- the Arizona geologist whose comments you totally misunderstood in order to launch this sky-is-falling scam -- has himself put the final nail in the coffin:
...Allison said last week his posting should not be construed to suggest there is a shortage that threatens First Solar. "World production is only a couple hundred tons, but there is a lot more sitting in the copper being produced. It is just that nobody is recovering it," Allison said.
-----
Are there other, real challenges facing FSLR? There sure are. But this tellurium supply thing... time to let it go.
It's a shameful fabrication on your part. You could not cite any source where Allison said those words. He made those comment "LAST WEEK"? Thank good God this Seeking Alpha article is only out on Monday this week, Nov. 19, today is Nov. 24. He coud not have saw my article last week and could not have said anything regarding my article last week.
What a shame!
www.azcentral.com/ariz...
The journal probably meantioned "last week" by accident. In any case, Lee Allison did not back off from his basic facts on his May 21 blog post. So I stand by on these facts provided by Lee Allison, i.e., tellurium annual production 215 tons, and tellurium price went up from $4 to $100. Beyond that Lee Allison can have his own opinion, notwithstanding the facts.
Your apology is as worthless as everything else you've posted, whether you call it "fact" or not.
I hope it works out for ya. Either way, your articles and blog have good insight on a little covered area of the alternative energy space.
The author of this article, who goes by multiple IDs has been widely known as a MAJOR SPAMMER especially for the stock SWC. Just go see the Yahoo Stock message boards for SWC.
He uses the IDs of ii2000426, tellurium_investor, jj2007pd46,
silverbutter, and a few others on Yahoo. His main ID was jj2000426 which he deleted once it was clear other posters were exposing his horrific results by referencing his old posts there. He is known by JJ on the boards and from his blog.
He uses multiple IDs to make posts, reply to himself, and rate his own posts.
So one basic question has to be asked before listening to a poster like this.
What legitimate person finds the need to delete old IDs?
Further, what legitimate person has the need to maintain multiple IDs to actually reply a further pump up threads?? (And yes, I actually have proof of threads where he talks to himself but forgets what ID hs is on.) Here's one:
messages.finance.yahoo...
He has pumped and SPAMMED numerous boards, blogs, and even a church blog for SWC for the past year. The stock has gone nowhere.
He got in to NEW (mortgage company) early this year and incessantly pumped it. Every other day, he was "laoding up" on the stock or "backing up the truck." Needless to say, NEW went BANKRUPT (see NEWP).
Now he finds himself stuck in FSLR. He has been short on this stock since about $100 and currently FSLR trades over $200.
According to his own admissions, almost 100% of his portfolio is invested in 2 stocks in a small niche sector (PAL, SWC). Would any one of a sound investment mind, put all their money into just one sector??
When FSLR announced int's earnings, JJ started screaming all over the FSLR boards about how the earnings were a "scam" and a "fraud" and then how there were "accounting errors" and how he was "calling the SEC." Well, that did not work so now he has a new tactic as you can see above.
Look, all I am saying is BUYER BEWARE. This is a post by an investor, and I use that term loosely, who is unethical and most his positions (SWC, PAL, FSLR) have moved over 60% against him. He also bought into at least one stock that I know of, which went bankrupt.
I have been monitoring him on the many Yahoo boards he posts, to warn unsuspecting readers.
If you want more information, contact me on one of the above mentioned boards; unlike JJ I use the same ID as I use here.
"Bipolar_Trader"
Supposing they can outbid others to say $1k a pound (appropriate for the rarest element on earth I think), they might get 75% of the market (a stretch) and then max out a little over 1 GW. That is about $2.5 billion in revenue. I'd guess that would result in around $300-500mill profit. That means say 3-5 years from now, growth grinds to a halt, and, with no share price appreciation from today, they'd be at a P/E of 35-50, mighty steep for a Co. with no growth prospects.
I'd be inclined to wait another quarter or two for them to continue their explosive growth, catch it at maybe $300, and then re-mortgage the house and short it to the hilt.
Where can you buy Te ingots?
www.micronmetals.com/t...
Make sure you buy metal ingot, NOT powder. You need to hurry. If too many people contact them first you are out of luck.
It is wrong to assume FSLR can outbit others just because tellurium is still affordable to them right now. The point is tellurium is still very affordable to EVERY tellurium user at current price. FSLR has NOT outbid any one and it will NOT outbid any one. There has been no demand destruction yet. But demand destruction MUST happen at some price point. I expect that price point to be much higher than current price, and FSLR will be the first to be kicked out because it uses waymuch more than any one else, per unit of product.
For that reason tellurium investment is a very good idea. I am not willing to disclose where to buy tellurium yet. But I found it on the web. If you are determined enough you can find out, too.
Furthermore, your statement that "First Solar could be forced to go out of business" does not follow from your premise that tellurium production could reach a ceiling; it merely could limit First Solar's production at a given cost. Currently polysilicon, the analogous ingredient in most other company's solar panels, *is* in limited supply - and yet the largest silicon-based companies are growing their production rapidly.
I agree with other responders here who are disappointed in SeekingAlpha's fact-checking. Clearly they have reached a limit with respect to availability of good-quality content.
A necessary step in your proposed reasoning is just how high the price of tellurium has to go -- how extreme the "expected" rush needs to be -- before it could dent First Solar's growth, let alone put the company out of business. Tellurium, a key part of FSLR's production, is nonetheless a tiny input.
According to a paper by U-C Berkeley researchers (lo and behold, you're not the only member of the "earth populace" to look at solar companies through the lens of materials scarcity), tellurium would have to shoot up another 20-fold before destroying FSLR's current cost advantage over competitors -- and that's even assuming, ambitiously, that competitors' costs don't also rise. socrates.berkeley.edu/...
To illustrate, inversely, if the worth of your writing as investment guidance were rise to 20-fold, only then might it be competitive with, say, laying out pages of the WSJ in the local dog park.
A necessary step in your proposed reasoning is just how high the price of tellurium has to go -- how extreme the "expected" rush needs to be -- before it could dent First Solar's growth, let alone put the company out of business. Tellurium, a key part of FSLR's production, is nonetheless a tiny input.
According to a paper by U-C Berkeley researchers (lo and behold, you're not the only member of the "earth populace" to look at solar companies through the lens of materials scarcity), tellurium would have to shoot up another 20-fold before destroying FSLR's current cost advantage over competitors -- and that's even assuming, ambitiously, that competitors' costs don't also rise. socrates.berkeley.edu/...
To illustrate, inversely, if the worth of your writing as investment guidance were rise to 20-fold, only then might it be competitive with, say, laying out pages of the WSJ in the local dog park.
- Berkeley qoute "Current production targets for CdTe still represent a small portion of the total solar production by 2010. If CdTe took over even a small portion of the market, we would then likely see resource constraints and the kind of material cost increases discussed previously. Therefore, the market will most likely be set by a mix of other technologies." pg31.
While not as alarmist as the OP here, the Berkeley conclusion is similar- that Te will limit CdTe panel growth - and at this point, with a PE close to 200, FSLR is pricing in massive long term growth that may not happen.
It is also an interesting idea to consider that for only $4M a competitor or say Chinese solar player could easily grab 200 tons of Te a year and provide just the type of price shock that that is imagined here.
Any alternate sources would be far too late to prevent the effects of a demand spike.
The current price for Platinum is over $23,000/lb it is not too hard to imagine Te at $2,000/lb or even higher than 20X in a short time period.
You say that it "is not too hard to imagine" skyrocketing tellurium prices. But on the flip side, it's not too hard to imagine plummeting prices as well. Human beings can imagine all kinds of scenarios. Smart investors, however, look for fact and coherent logic in order to harness their imagination. I haven't found either in the arguments of Mark Anthony (or of his alleged aliases).
"If CdTe took over even a small portion of the market, we would then likely see resource constraints and the kind of material cost increases discussed previously." [20x]
- How is it ambitious to anticipate solar silicon costs are likely headed down?
"For emerging thin film technologies such as CdTe and CIGS
we derived cost data based on conversations with suppliers (First Solar), public disclosures, and projections from various industry analysts."
- would like more details about costs!
On your second point, I remain unconvinced that the silicon shortage will ease significantly in the next few years, and therefore contend that it's a heckuva lot more ambitious to expect higher silicon costs than it is to predict that FSLR's business is doomed, which, let us not forget, is the extreme position which the OP has taken, and probably, based on his position, took that opinion first before looking for evidence to support it.
You mean less ambitious? I am glad you think polysilicon stays strong, I have some LDK (no FSLR either way) and hope there is no lemming like rush to overproduction
whatever the OP motivation the technical details of the debate have turned out to be intriguing
One thing you don't understand is that you presure that since global tellurium production is limited, it merely put a cap on how much FSLR can produce. So you think FSLR will be capped in growth but does not go out of business.
But you completely forget that they are NOT the only tellurium users. There are other emerging new tellurium applications, in DVD discs, in new flash memory chips, in electric-cooling CPU chips, etc. Those new application alow can drive tellurium price to a level inaccessible by FSLR, without FSLR buying a single pound of tellurium. They will kick FSLR ot of the club.
In another word, tellurium price will go up so high that FSLR can not afford to buy even one pound at that price, because they will not be able to produce anything at any profit margin at that price. They will have to simply give up the business at that point.
A company CFO can go to jail for misrepresenting his company's fundamentals to investors at a public conference. Or we can listen to you, a Johnny-come-lately amateur writer and investor with a short position.
By the way, for anyone who's interested, the conference audio can be heard here:
www.corporate-ir.net/i...
tinyurl.com/2gv27b
A Terrawatt is 1000 GW. Terrawatts must be at least 2000 GW - let's assume that the CEO equated 2 TW as "Terrawatts".
1 GW of power requires about 135 tonnes of Te. So, 1000 GW should require about 135,000 tonnes, and 2000 GW (2 TW) requires about 270,000 tonnes of Te.
So, the CFO indirectly stated that there is 270,000 tonnes of Te available, presumably for FSLR's exclusive use.
According to the USGS, the GLOBAL reserve base is only 21,000 tonnes.
minerals.usgs.gov/mine...
Seems like the CFO has some connections from another planet.
Please correct me if I'm wrong - otherwise, would you still invest in FSLR knowing this?
Do you understand the concept of Demand Destruction? See wikipedia entry:
en.wikipedia.org/wiki/...
Currently Te only costs FSLR 3 censt per watt. You think a price raise of 10 folds or 20 folds is not possible? Think again. The price does not raise on its own. The price already went up from $4 to $100, because there is a shortage. When there is a shortage, price will have to keep raising, until either supply is increased, which is not quite possible if you understand how tellurium is produced, or, there MUST be demand destruction to bring demand down to match the level of supply.
As FSLR is the largest tellurium consumer per unit of product, it will be the first victim of demand destruction. I ahree that demand destruction will happen at price way much higher than current price. But it MUST happen, that's economic 101. So invest in tellurium right now is a pretty good idea because you know demand destruction is way much higher from current level.
A tellurium rush will speed up FSLR's demise for sure!
The fact of the matter is despite of rapid price raise in recent years, there is no indication that tellurium supply has increased. So the market fact does not agree with your analysis in 1999. WHY?
I think your analysis of the tellurium supply potential was frauded. You assume all copper world wide contain the same high concentration of tellurium. Chile produces 1/3 of the world's copper but nothing in tellurium, why? You also assume there will be no emerging new technology that uses tellurium. You never heared about burnable DVD in 1999, or flash memory, or a CPU that's coole electronically. All those things use tellurium.
Last but not the least, although you are now a competitor of FSLR, you have a huge vested interest to defend your 1999 analysis of potential tellurium supply. You have spent 30 of your best years doing scientific research at NREL. I respect that. To admit that tellurium supply can not increase significantly from 200 ton level, is to admit that you have wasted 30 years of your best time and your best energy research something that does not have a future. That, is as bad as some one take half of your life away. You absolutely can not accept it, emotionally. So you have a vested interest which will bias your view point. I do have a bias due to my short position on FSLR, but it was a totally insignificant stake compare with your 30 year academy life.
Mind go to my blog and continue the debate? Seeking Alpha seems to be slow in posting comments.
Also, what about substitutes? Maybe the company is run by idiots, but if they know they are dealing with a very rare substance which could potentially soar in price, perhaps they are investing R&D in a solution? This goes for the chip manufacturers and everyone else.
Finally, you assume that because FSLR uses the most tellurium, they will suffer demand destruction first. But the question is a) how critical is tellurium to the manufacturing process and can it be substituted and b) what is the profit margin. Again, across all industries.
For instance, movies are already downloaded. If tellurium became too expensive, DVD prodution could fall without affecting sales as consumers transition to digital.
If there is an investor tellurium rush, it takes only a few months to knock FSLR out of business. Without an investor rush, it takes longer but FSLR wil be out of business in a few years nevertheless.
FSLR's sole business is entirely based on CdTe. Replacement? They can replace with regular Si solar panels. They might as well demolish the factories and start over to build silicon factories, which gives them no competitive advantage.
Other applications use far less tellurium, per unit of product, than FSLR. When tellurium price is so high that FSLR is no longer profitable, to DVD vendors probably that just add one or two cents per disc and they can afford it. It probably cost intel half a cent per CPU which sold for $300. So Intel can afford it. But FSLR will have no profitable margin at that kind of price. So they will be the first victim of demand destruction. First to be kicked out of tellurium club.
minerals.usgs.gov/mine...
...In 2006, the prices for selenium and tellurium decreased as consumption for the metals decreased and global production increased. Domestic production of primary selenium and tellurium increased in 2006...
...World demand for tellurium is thought to have decreased slightly in 2006... With the historical high prices, many metal companies have cut back consumption or replaced tellurium. Consumption in many of the other uses has increased but not enough to offset this reduction....
...Consumption of tellurium in electronics applications was estimated to have increased in 2006. High-purity tellurium is used in electronics applications, such as thermoelectric and photoelectric devices...
...The United Kingdom price for lump and powder, 99.95% tellurium, as published in Mining Journal, started the year at $100 to $120 per kilogram. After the average tellurium price reached an alltime high of $155 per kilogram on June 13, the price fell throughout the year and ended the year at a range of $50 to $70 per kilogram...
Outlook:
The supply of selenium and tellurium are directly affected by the production of the principal product from which it is derived, copper, and to a lesser extent, by the production of lead, nickel, or zinc, produced from a sulfide ore. Since global production of selenium and tellurium-bearing copper ore was expected to rise in 2007, global selenium and tellurium production will probably also increase. Recycling of obsolete copiers and other electronic waste material has been increasing during the last couple of years. Increased environmental regulation and prices have encouraged the recycling of electronic scrap and have increased secondary production of selenium and tellurium...
Also note that 2006 USGS paper rarely talked about CdTe. FSLR had only one production line during the most part of 2006 so the demand wasn't significant yet. Now it has 7, and each one producing at almost twice the speed. So it's 12 to 14 times higher demand than 2006.
Well! I was about to post a question -- namely, why sell immediately avoid a total loss? It doesn't seem warranted from the article itself, and for someone like myself (expecting a serious correction or bear market) it makes a lot of difference whether it is real soon, a few months,, or a few years.
I decided to check the comments first. Glad I did! Here are a few comments not made yet.
1. If Mr Anthony is the maldoer (I just coined that) suggested here, that would explain it. And the 2-3 mos. he mentions in a preceding comment might be enough to cover his shorts (altho isn't it now 60 days' max?). But please note that he is forthright about his short position.
2. I thought his article seemed knowledgeable and plausible right up until that last paragraph. Why is Seeking Alpha negligent for not being aware of a problem (assuming there is one)? Seems unfair to them. Do they do peer reviews? I assume not, since these articles are turned out very fast. (In fact, I've also assumed that's the reason for lots of grammar-and-so-forth errors in these fin. articles, many made by clearly articulate and literate writers.)
3. If he's all he's supposed to be, Seeking Alpha should be informed -- in particular, of the accusations made by User 123811. Please do tell them; ingenues like myself need protection from that sort of thing.
4. At one point it seems as if the order of postings was reversed. Mr. Anthony first tells us where to buy Tellurium, and then states he won't tell us. Sounded really out of it until I noted that the order of the posts had been reversed. That's also worth mentioning to Seeking Alpha, although it might well just be a one-time glitch.
I do hope you all keep the rest of the comments on this site. Moving it elsewhere would be a disservice to most of us.
BTW: As a woman, I can easily understand using more than one pseudonym, and/or changing them. (On the other hand, I thought that talking back and forth to yourself by using different names was only done as a joke, on stage -- or at press conferences.)
I don't have more time for this, but will try to check back later to see if there are responses to my comments and the implied associated questions . . .
Equally telling: a couple of posters have been calling outright for seekingalpha to censor/delete the article since it was "fraudulent" or "misrepresenting facts". incidentally none of them has even bothered to show the slightest "misrepresentation", lie or whatsoever. Except for one poster citing a Berkely study 8which rather supports Mark Anthony, btw) the negative commentators have induldged only in personal attacks with a remarkable and complete lack of any substance, facts, proofs etc.
I urge seekingalpha to keep this article and not to succumb to people making hell of a noise with hardly anyone of them even knowing, obviously, what they are talking about
My Question is: Is there somewhere a futures market for Tellurium that FSLR has managed to guarantee their supply, or a reasonable price ?
P.S I am not going to buy Tellurium, but probably will be shorting some solar stocks such as FSLR with a P/e > 200 in the future.
P.P.S There is nothing wrong with the ordering of the posts ... The issue is to do with whether the post was a reply to an earlier post, or a reply to the original article. This determines the order.
The global tellurium market is extremely narrow. There is no future contracts traded on this commodity. There doesn't even exist an international exchange where this commodity is traded. All trades are direct cash transactions between producers and consumers. One place I inquire about tellurium this morning, The MicroMetals. They do not have any inventory, and will have to call me back regarding future availability and price. I do have secured tellurium from another source I am not willing to reveal, but is still waiting for shipment. People ask the CFO of FSLR where to buy, if he had identified terawatts level of tellurium availability.
It's an absolute insane and nonsensical statement by the CFO and the people laughing over the Tellurium issue better listened and asked themselves just one little question: Regardless of the future demand of Te, how trustworthy is a management, its statements and financial figures if they tell this kind of absurd nonsense right at a conference call?
just think about it. I would not be surprised at all if somewhere down the road there will be accounting and balance sheet issues popping up at FSLR. No prediction, just mho.
It's an absolute insane and nonsensical statement by the CFO and the people laughing over the Tellurium issue better listened and asked themselves just one little question: Regardless of the future demand of Te, how trustworthy is a management, its statements and financial figures if they tell this kind of absurd nonsense right at a conference call?
just think about it. I would not be surprised at all if somewhere down the road there will be accounting and balance sheet issues popping up at FSLR. No prediction, just mho.
www.thinkequity.com/ba...
And yes, there is a section addressing the risks of CdTe. As with investing in any company, there are risks to be considered.
There are currently 40 companies listed in ThomasNet relating to "Tellurium." Not all of them may be major suppliers but then again, not all companies who are, are listed.
See for yourself: www.thomasnet.com/prod...
I'm not a huge fan of First Solar to be honest and feel it may be overhyped but that won't stop people from investing if they're still bringing in the money. And lastly and most importantly... it is just as ridicululous for anyone to "need to hurry" and buy the metal as it is to hurry and sell the stock.
When you go through the list of the tellurium "suppliers", do you realize that most of them are NOT tellurium producers, but merely processors. i.e., they receive low grade tellurium and process into high grade tellurium products. You can have a list one hundred of such company, or one million, it does not make a difference in the tellurium supply.
Only ONE company out of the list, PD, is a tellurium producer, every one else is merely a secondary processor. Tellurium is rarer than platinum, that is an earthly truth no matter how many companies exist on earth.
It was in response to a question at the Pacific Growth clean tech conference.
He could have dodged the question. He could have said they'd identified an "ample" supply. He could have just said "that's a business secret."
But instead he said they see plenty of the stuff in the pipeline.
Now... why would he set himself up that way? He didn't need to pump up the stock -- it had just jumped dozens of points overnight.
There was no upside to him saying that if it was a "lie," as you've claimed. Only enormous downside.
So why do it? A reasonable person would conclude that FSLR knows Te is important to its business and has taken steps to ensure a supply.
You, on the other hand... descended deeper into your fantasy-world scenario in which you extract revenge on a company that has so cruelly wronged you. By the simple fact that its share price has gone up, while you want it to go down.
How sad.
You asked the wrong question. The CFO did make that terawatts comment. So what you need to do is check the FACTs on the science book to see if what he said was correct or incorrect, not look for his motives. The fact says it is not correct. All know tellurium mineral resource in the whole world put together would not be enough to produce even just 1/7 of a terawatt of solar panels, let alone terawatts. He made a false statement to the public, which has the consequence of misleading investors in judging the company's future. Why and how he made that false statement, is this something punisheable under the law, that's up to the authority to decide. But the jury is out there that his statement was false.
Is it because you yourself are a liar? The statistics you've cherry-picked do not tell the full story, as you are well aware by now. But still you persist.
Your declaring a statement "false" doesn't automatically make it so, no matter how shrill you get. As for asking the "wrong questions"...
You really should do some further reading, if you haven't already, on the notion of "conversion efficiency improvements." Just for starters.
You put it lightly at "a potential problem with a scarce resource". Tellurium is a vital raw material to FSLR. Without it they simply have to shut down business. In comparison the oil issue is moot.
i am somewhat convinced by mark's arguments about Te's importance to FSLR, and nobody has made a argument which negates his position.
but i am not convinced that the scientific community cannot be wrong about rarity of Te ( i think its possible that they may be wrong, and if we look hard enough we can find Te in abundance for the right cost)
so if mark is right, First solar is going to have cost overruns pretty soon, and i think that may be a time to establish short position, since its quite possible that they will continue running higher making my job easy.
the worst thing maybe mark is right, whole world comes to know about Te and FSLR nexus and Te price goes to moon, everyone sells FSLR and i miss the opportunity.
i hope i can take some time out to do some research (since i dont want to miss the opportunity)
Progress in Photovoltaics: Research and Applications
Volume 14, Issue 8 , Pages 743 - 751
"Improved Estimates for Te and Se Availability from Cu Anode
Slimes and Recent Price Trends"
The article says that with an estimated 12 million tonnes of Cu anode processed, there is the theoretical possibility of 1300 tonnes Te per year. At historically prevailing extraction efficiencies of 33%, this corresponds to Te availability as 430 tonnes. Efficiency can be improved to possibly 60%, or 781 tonnes/yr. Actual Te production in 2003 is estimated as 304 tonnes, 50% higher than USGS.
FSLR is be doubling capacity every 15 months (440 MW end of 2007, 790 MW end of 2008). That's 4.6 GWp by end of 2011. If current world production of Te doubles by then and they acquire 75% of all Te, that's 450 tonnes. Please note that this is a very FSLR-friendly view. At the expected (internal and external estimates) 0.09 g Te/Wp (at best), that's 5 GWp. So it's possible they can have enough Te until end of 2011. It's a theoretical impossibility for them to keep the current trend past 2012 because there is only 100 ppm (new estimate) Te in copper, and all other sources are insignificant. My Te numbers come from a peer-reviewed source that seems more accurate than the numbers of the USGS.
FSLR charges $2.48/Wp and contracts call for decreasing price 6.5% per year, or $1.9/Wp in 1Q 2012. Production cost is $1.15 and expected to reach $0.63 by 2012. That's $1.3/Wp profit now, and $1.3/Wp in 2012.
If current trends hold and Te is not a factor, that's 1 GWp and $1.3B for 1Q 2012. At today's market cap of $16.5B, that's a P/E of 13. So today's price is entirely justified for those looking at 4 to 5 year time frame, and confident that we'll somehow get all the Te we can out of an 10% per year increasing supply of copper, and FSLR by itself outbids everyone else and the price does not increase more than the 2000% increase of the past five years ($5 to $100/kg). So a P/E of 13 at today's price in late 2011 is not impossible, but it requires faith. $200 a share is not insane for 2011.
Now to examine the effect of Te price increase. If Te increases from $200/kg to $2000/kg, FSLR will lose $0.19/Wp. So Te could cost them $0.19 of the $1.3/Wp profit (15%) out of the 1GWp poduced in 1Q 2012, giving a profit of $1.1B and a PE of 15 in 1Q 2012 at today's $16.5B market cap. But increasing production after 2012 at current trend is impossible due to Te its relative non-existence on planet earth. A more reasonable estimate is that serious Te problems will manifest in 2011 if not 2010.
Te going from $100/kg to $3000/kg is possible for FSLR to support and remain competitive and profitable and to beat out competitors looking for Te.
My prices are for the standard 99.95%, not semiconductor grade which someone says FSLR does not require. Adjusting for the extra $500/kg needed to purify to semi-conductor grade, if necessary, does not overly-affect these numbers
Optimistic view: FSLR will be able to acquire 1.5 times more Te in 4 years than the total world production of 2006 (304 tonnes). Current guidance from FSLR says this will mean a profit of $1.3B per Q starting 2012 and to hold at that level thereafter (PE=12). Look for Te to be $1,000 to $3,000/kg by then, and to hold steady thereafter. A factor of 10 increase in Te cost does not hurt FSLR very much. The research article said that price is "sustainable". $3000/kg will cost FSLR $0.30/W just for the Te, reducing profit from $1.3 to $1/W giving $1B a quarter (PE=16).
Pessimistic View: FSLR will only be able to acquire 50% of 2006 total Te production (150 tonnes) in 5 years. Production is therefore limited to 0.3 GW per quarter and PE stays above 40 from 2010 until 2012. This seems to me to be worst-case.
I consider the following accurate: 100 ppm Te in Cu. No other substantial source. At least 0.09 g Te/Wp needed. 300 tonnes produced in 2006 at $175/kg. FSLR profit to remain $1.3/Wp for the next 5 years in absence of Te problem. World Te production cannot be more than tripled in 5 years. FSLR production is doubling every 15 months. FSLR cannot sustain current trend past 2012 due to Te non-existence. This last fact is the most assured.
I think I probably saw that report on NREL web site. They contradict USGS data. I believe the USGS data is more credible. NREL is technology export, not mineral and commodity export. The NREL data iw swrong because:
1.The presume all the world's copper mines are the same and all contain 100 grams of tellurium per ton of copper, and 50% extraction efficiency is achieveable by all copper mines, and they every one will be using electrolytic process to refine copper.
All of these presumptions are wrong. Not all copper mines are the same. Chile produces 1/3 of the world's copper, but its copper mines contain virtually none tellurium, and it produces almost nothing. The four major tellurium producing countries are: USA, Canada, Japan, Peru. Other countries only produce minorquantities.
Copper miners also switch to the chemical leaching process instead of electrolytic process in recent years, because it's cheaper and more economical. This will pre-clude tellurium extraction. That's why although copper production increased, tellurium production actually decreased in 2006.
2.They made assumption that other industries use very little tellurium, and there is no emerging technology that uses this metal. As matter of fact, tellurium price increased dramatically in past few years, before FSLR even started any large quantity production yet. So none-CdTe demands already exceeded supply. The metal alloy industry and other industry users use far less tellurium per unit of product. So they can afford a far higher price in order to secure their supply. FSLR will be out bid when there is a tellurium shortage.
Emerging application demands of tellurium are quite considerable. One example is re-writable DVD, another one is the new flash memory chips, yet another one is CPU chips that are cooled electronically. All these use a small amount of tellurium. But the global demand is huge when you consider the huge scale of production of DVDs and computer chips.
There has been a tellurium shortage already and historically accumulated tellurium excessives have been used up. The shortage can only get worse in the future, FSLR's own rapidly expanding demand adds fuel to the fire and can only make the matter much worse for itself. It will soon be outbid by other much needy and much more affordable industry users.
I have no reason to believe that FSLR will not be able to obtain 100 tonnes/yr (1GW/yr). It seems clear that 1,000 tonnes/yr (10 GW/yr) is improbable. The gray area is between and it's a difference of PE=60 and PE=5. I think they will someday be able to get 300 tonnes/yr, but the PE will never drop below 20 at this $200/share price. Maybe in 10 years with steady 5% copper annual increase they can get even up to 2000 tonne/yr (20 GW/yr). New copper plants in new reserves can even get them beyond the 21000 tonnes of known reserves the USGS reports. So the 3 or 5 to 10 year range for FSLR should see a major slow-down because of Te.
A 2000 article that a lot of web sites cite claims 20 GW/yr, but I think it's outdated, as the newer research says Te averages 100 ppm instead of the previously believed 200 ppm. Of course some have higher concentrations than others, but it does not materially affect the discussion.
One other important thing: the amount per W is not a constant. Today's 3 micron layer has about 9 g/m2 of Te, or 9 g/m2/100 W/m2 . That's .09 g/W. There are 10^9 W/GW, so that's 90 MT/GW. Let's use 100 MT and say at 1000 MT available, that'd be 10 GW/yr.
But it only takes about 1 micron of CdTe to absorb the solar spectrum - experimentally, good cells have been made at 1-1.5 microns by BP and U. Toledo. This means 20-30 GW/yr at 10% efficiency. Of course, the efficiency can also rise, adding a bit more. And then there's potential light trapping - it's been demonstrated throughout PV, especially in a-Si and thin, indirect gap x-Si films and wafers.
Welcome to the debate. First this paper said the NREL research by you have greatly over-estimated the potential availability of tellurium:
www3.interscience.wile...
You can only see an abstract and have to pay to get full article. Email me privately at ii2000426@yahoo.com and I can email you the whole article. Please comment on it.
I cited FSLR's own number of 7 grams cadmium per panel of 2x4 feets, based on the ratio of atomic weight that's 8 grams tellurium per panel. I think 3 micron is just a rough number, it could be 3 to 5. If it is exactly 3, my calculation using specific weight 5.85g/cm^3 of CdTe says 9.36 g/m^2, or 6.74g/panel of tellurium.
I am skeptical of 1 micron thickness. When something is too thin it becomes transparent and does not catch sun light. 1 micron thin of any material is quite transparent! Besides you have a electric current leakage problem between the top and bottom conductive layer, probably won't last long in the exposed environment. In any case FSLR is not using 1 micron so let's not discuss some hpothetical numbers.
And you are still insisting that the bulk of the world's future tellurium production can be provided to First Solar. Are you aware of emerging applications like rewritable DVDs, Intel's new flash memory chips, and thermoelectrically cooling CPU chips, among other things. These applications have way much broader usage, uses far less quantity per unit of product, and can afford a much higher price than FSLR.
The fact of the matter is tellurium price run up dramatically from 2000 to 2006, from $4 to $100, it was not attributable to FSLR, but to OTHER tellurium applications, because FSLR only start to have significant production in second half of 2007.
I still don't think FSLR can survive a tellurium price run, which is pretty much going on right now if you care enough to track the tellurium price change recently.
Interestingly, taken over 30 years, 30 GW/yr is close to a TW, so it sounds like FSLR is off the hook on that statement. BTW, since Te is not destroyed, like a fuel, it can be recycled, so once the Te is in the modules, it stays in use and can be added to the next generation of Te to get that much more CdTe. So 30 GW/yr recycled every 30 years, adds another almost 30 GW/yr to the annual supply. This can add up!
Your comments about other Te uses: It's my understanding that these uses are tiny - under ten MT/yr each - and not growing like PV.
My number is in g/m2 not g/7200 cm2-module.
Ken Zweibel
OK, that the first point he made. Second point: 1000 tonnes/yr to get 10 GW/year (2012 by all CdTe makers). 1000 tonnes/yr is 3 times more than 2006 total production, and it has to be distributed among all CdTe makers. If all the other industries still need the 300 tonnes they used last year, that's 4 times more Te needed. That means 4 times more copper has to be mined in 5 years. If we double recovery efficiency of Te, "only" twice as much copper is needed in 5 years.
Therefore his first and second points are refuted.
His third statement is also not true. He states FSLR can go from 3 to the theoretical limit of 1 micron WITH an improvement in efficiency BEFORE trapping is used. The whole reason they have trouble getting thinner is because it results in a loss of efficiency. The April 2007 paper below (page 9) shows a team in the lab that was able to get 11.9% as the best efficiency from 1 micron CdTe. FSLR is already claiming 10.7%
www1.eere.energy.gov/s...
I'd say the best FSLR can hope for in 5 years is getting down to 1.5 micron and MAINTAIN efficiency. He and I are also assuming lifespan and efficiency under HOT FIELD conditions can be maintained.
So let's assume half as much Te per W is needed in 5 years by going from 3 to 1.5 micron and maintaining efficiency. Going from 3 to 1.5 microns means they'll be 4 times closer to the theoretical limit of 1 micron before efficiency is loss. So it's not a doubling of difficulty to go from 3 to 1.5, but it's a factor of 4 improvement in accuracy and consistency in deposition without losing production line speed. This requires 35% improvement per year in (production line speed) x (efficiency) / (thickness minus 1 micron). Someone can check last 2 years to see if they have been improving this fast in the past.
For the 5-year time frame, there's enough Te for CdTe and 200 tonnes left over for existing industries ... **IF** ... all of the following occur: Te recovery rate is doubled under heavy price demand, copper production increases 5% per year, and CdTe thickness is cut in half. It's entirely possible. This will provide enough Te for 10 GW in 2012 which should be enough for the intire CdTe field to keep its current growth rate. For the 6th year, it is impossible for Te to not slow the growth. At 10 times current value (to create strong demand to double recovery assumed above), Te will cost 10% of FSLR's profit at 1.5 micron, so 20x increase in Te is feasible. (assuming $250/kg today). Purifying cats are consttant and already in FSLR guidance of $1.3/W profit now and in future. Falling dollar increses Te cost, but increases $ profit for euro-sales even more.
If light-trapping without more CdTe has been demonstrated in the lab for CdTe, I hope he'll let us know. I found a paper that says 0.2 micron is theoretically possible with light trapping, eventhough 0.8 is the theoretical limit based on 0.8 micron light passing right through thinner layers. In the lab, 1 micron is the limit for simple CdTe layers.
Tellurium will devastate CdTe expansion rate before 1Q 2013. No one has posted anything to refute this.
It's fine to discuss and dissect the Te issue; it's quite relevant. I think it's a real service to see the harder sides of companies and technologies. The web adds to our understanding. Too many existing, traditional sources present only one side of the picture. With the web, for example, I expect it will be harder for anyone to keep up the mirage of "clean coal" and hypothetical, low-cost CO2 sequestration. This is very important as we face the real energy and environmental challenges of the planet.
Te availability will likely remain one of the most important issues in the future of CdTe, because the growth of CdTe, due to its cost structure, will be so strong.
At 1 micron thickness, there are only 3 grams/m2, which even at $5000 kg is $15/m2 - at 12% (120 W) that's still about 13 c/W. This might be the worst case, and one the other PV technologies would have to be better than to survive (aggregated to the system level).
Light trapping in a CdTe cell shouldn't be hard. Many TCO/glass makers like Asahi/AFG make textured TCO for a-Si modules right now; those glass/TCO substrates can replace the smooth ones CdTe uses. Similarly, transparent back contact CdTe cells have been made by IEC - just add a back reflector to that (like a-Si does with ZnO/metal), and you are there. That's what allows going below 1.5 microns towards 0.3 microns or so. Take that into account and adjust the cost and usage numbers above by 3 again and you have an even brighter story, just from existing sources.
Did you know that astrophysicists believe that Te is the most ABUNDANT material with an atomic weight over 40?
Ken
I understand that you feel you want a better venue to discuss Te availability. You feel like want to publish on a peer reviewed academic journal. But for people who are not in the professional field, peer reviewed adademic journal is an inaccesible barrier that we can neither publish, nor are even interested in reading. An average academic paper nowadayd is read by an average of less than one person in the whole world. So I hope you stay in a public form where there is more audience and every one can participate in the debate fairly. But whatever you choose to use for your discussion, better do it much sooner than 6 months, you know keeping silence for 6 month is very damaging in the public's confidence in the CdTe technology.
We have a few things to agree on. We can all agree it's very relevant and important to discuss Te cost and availability. I also agree with you that indeed Te is the most abundant element in the universe, among anything with an atomic number over 40. I am all for it to go some where else in the universe to find more abundant Te source. But making that argument shows how desperate you have become! Because clearly there is no enough Te on the earth and you need to go to outer space to mine tellurium!!!
So let's NOT start talking about possibly importing tellurium from another galaxy in our universe neighborhood. The earthly tellurium is all we have.
Coincidentally do you know helium is the second most abundant element in the universe, but we are running out of helium on earth fast, and we really need to preserve helium for future scientific research need, instead of wasting it in kid's ballons in the MALL. CdTe application is almost as trivial as kid's helium ballons on wasting our precious natural resources.
Sure it's much easier for x-Si players to make thinner wafers. You start with several hundred times thicker x-Si wafer, reducing material thickness from 300 micron to 100 micron, is way much easier than reducing it from 3 micron to 1 micron. Why do you turn your argument to x-Si when we are talking about CdTe? Has PrimeStar decided to switch to x-Si? CdTe has wider bandgap (1.58 eV) than x-Si (1.1eV) hence less efficiency. You still have not dressed the issue of leakage. 1 micron very small area CdTe cells might be made in labs, but large area 1 micron cells in mass production is never demonstrated and not possible in existing technology.
You came up with a hypothetical number 30GW/year which is not backed up by any actual number, and you pushed it to 30 year. That's rather ridiculous. Why don't you hypothetize a 0.1 micron thickness, and push it to 300 years and claim a bigger number? Hypothetically regular soil any place on the earth contains 1 ppb of tellurium. So it could be an inexhaustible amount of tellurium source should you put the whole earth into a smelter to produce Te. It's ridiculous to argue on hypothesis instead of on real numbers.
USGS's known Te mineral reserve is 21,000 metric tons. At 50% possible extraction efficiency that's 10,500 metric ton. Barely enough to produce 105 GW, where is terawatts level of tellurium available?
Not only the other Te uses are not tiny at all, they dorminate current Te consumption. The Te price driving force in recent years is due to other usages, not due to CdTe. As late as 2006, FSLR only produced 60 MW which is barely 6 tons. So it should be correct to say that so far CdTe demand is tiny, and all other applications are sucking up all available supplies and driving up price. That driving force will continue to drive tellurium price up until eventually it is no longer affordable to make CdTe solar cells. The expanding FSLR demand could only add fuel to the fire. Should PrimeStar start production, more fuel to the fire. Should small investors like me jump in to hoard tellurium for profits, it's like dynamite.
Frankly I think PrimeStar really need to re-think its development path. In a chaotic tellurium panic hoarding and explosive tellurium price increase, any CdTe solar cell company would not be able to survive. How would you prevent people from hoarding tellurium for a profit? Legally and morally any one can buy some pounds of tellurium, FSLR does NOT have the right to claim a majority chunk of the world's tellurium resource just because it needs the resource.
Fabtech provided very good profile of FSLR and its future road to success: www.fabtech.org/conten.../
The Fabtech article simply re-iterate everything being said by the company executive and took them at face value. There is neither "research, verify or confirm" nor due diligent study in that article. I already quoted the CFO's "terawatts" comment, and pointed out that it was an outrageous lie. I directed readers to check the facts from USGS sites. Now go look up the data from the USGS site and you will see "terawatts levels of tellurium availability" is completely false!
Fabtech provided very good profile of FSLR and its future road to success: www.fabtech.org/conten.../
can you please let us know a rough timeline based on your knowledge about First solars projects, current rate of usage of Te etc.. how long it will take before we will see Te prices shoot through the roof ($1000 a pound or so)
and when can we see First solar getting financially affected by the price rise of Te??
sorry i am a bit lazy, and was hoping you have it on top of your head.
thanks...
I can not give you a specific time line. But I can give you definite end result. The end result will be FSLR ceases its CdTe solar panel business altogether.
We know one fact, the price of tellurium has been going up a lot in recent years. No one dispute that fact. When price goes up it tells you demand exceeds supply. The price will keep raising, until the price is high enough that there is enough economic incentive to produce more, or the price is so high that tellurium users are forced to cut back usage or stop using it altogether, or both, until the supply and demand is brought into balance.
I do not see such a balance can be achieved at current Te price level. At $100/pound, the price is still too cheap and the cost is still too insignificant. For example in alloying application, One ton of steel probably needs 50 grams of telllurium, or about $10 worth. The steel alloy itself is worth $2000. The cost of tellurium is just too insignificant. They might replace with selenium with less effectiveness, and selenium is not any cheaper than tellurium either.
Every single tellurium users use a very tiny amount of tellurium per unit value of products, so they can afford to pay more to get their supply. The least affordable one is FSLR, because it uses far more than any one else. When it is necessary to kick some one out of tellurium consumer club in order to reduce demand, FSLR will be the first one to be kicked out.
On the supply side, the current price provide too little economic incentive for any one to try to increase production. One ton of copper contains about 100 grams of Te, and about 33%, 33 grams, is extracted using current technology. One ton of copper is $6600, the 33 grams of tellurium is worth $7. Who would bother to spend time and money trying to research new technology and purchase new equipment just to get $8 of tellurium instead of $7, when the main copper product value is $6600? They would rather produce 25 grams instead 33 grams. The reduced supply may actually jack up price and they end up getting paid $20 for the 25 grams, instead of $7 for 33 grams.
The price raise will ultimately result in demand destruction, which is the demise of FSLR. That will happen as a sure bet. When does it happen depends on how fast price can go up. But if my analysis here makes sense to any one, people will realize that tellurium price MUST go up a lot from here. And people will hoard in order to try to profit from it. And when that happens, the price raises in an explosive fashion, bringing about FSLR's demise that much faster, maybe in 6 months to a year!!!! The more people decides to hoard tellurium, the faster you will see that happen!!!
Seems to me that there is agreement that the price of tellurium should rise substantially in the not too distant future.
Anyone got strong ideas on how best to go long tellurium?
When you "urge" people to buy anything, it's immediately apparent that you are not an investor, but a pumper. You are roughly equivalent to a used car salesman.
As an author for Seeking Alpha, I have gone through the same process and have connections within the organization. I believe that they would welcome a suggestion by myself to have the facts in this article (and those on your site, which solidify the fact that you are merely a pumper) and to ban you from this site.
I don't want my name associated with this kind of crap and believe the only good information is objective information. You are deliberately misleading investors on a subject that isn't easy to understand. I'm sure you picked this subject because of this fact.
Let's review:
1. You talk about a highly visible company.
2. You demand action.
3. You discuss information which no one else really knows anything about (which you even admit), thus limiting the probability of being challenged.
4. In your bio, you say "Mark Anthony" is an alias.
5. The only stocks you've ever written about are ones in which you hold a vested interest.
6. You wrote this:
"As of this writing, the stock price of PAL has been pushed from recent high of $12.65 to a multi-year low of only $3.40, while prices of its metal products are near multi-year highs. I have sufficient reasons to believe this is a deliberate stock price manipulation.
This is an extremely rare opportunity that investors need to seize immediately and load up PAL at this incredibly low entry price, I urge people to rush in to buy. For all those folks who could not bear the pain and sold, now is time to buy back your shares. Don't let some one else steal your shares at this dirt cheap price."
I will be contacting Seeking Alpha shortly. Either they lose me or they lose you. I'll let them decide.
Regards,
Ryan
I am pretty sure the above is your real name, because you obviously never use an alias on Seeking Alpha.
I totally and absolutely REJECT your unfounded accusation that I present false information in my articles. My articles present facts and have plenty of embedded URL links any one can follow through to verify basic facts. There has been numerous such false accusations since the publication of this article, but no one could point out exactly where I made any false representation in my article. Because there is no such false representation in my article.
The tellurium shortage situation is actually much worse than I realized when I first wrote the article. 5N Plus Inc., the dorminant CdTe supplier to FSLR, now goes public and you can check out its prospectus. On page 26 it claims the need to expand annual capacity to 350 metric tons of CdTe, and possible even further double from that level, in order to satisfy the demand from FSLR and from other CdTe solar panel makers.
That's a lot of consumption of tellurium. I do not know where they can find enough tellurium to produce 350 metric tons of CdTe per year. So expect tellurium price to run up to crazy levels. I have invested in physical tellurium ingots and will continue to buy more.
Over the course of 2007, the price of tellurium have doubled. I should have studies tellurium and bought at the beginning of 2007.
Big surprise! 5N Plus's sales revenue for the quarter does NOT increase much at all from last quarter, from $6.3M to $6.8M. 55% of the sale was CdTe and CdS to First Solar. I was fully expecting a doubling since FSLR more than doubled its production recently as their new Germany factory entered full production, bringing the production lines from 3 to 7.
5N Plus is the major, almost the only CdTe supplier to FSLR. I am beginning to speculate that they are probably not getting enough CdTe raw material, because of a tellurium shortage.
To find out 5N Plus filings, go to
www.sedar.com/
go spam eslwhere!
hurry,? haha, what a joker!
reading your posts on PAL was also enlightening. it looks like you take a position and stick with it, no matter if it is working or not.
that might be good for bohemath investors like buffet, but normal people (with mediocre funds) like me, can be much more nimble in their trading. sticking with losing trades like that for percent after percent seems like madness. i suggest you go read a book by william oneill or two and maybe give the message boards a rest.
The market has spoken for me on PAL/SWC. I made tons of money but this is just the beginning.
Mean while the market has also spoken on tellurium. I stick to my prediction that FSLR go out of business in 2 years. Now I believe the demise of FSLR could come within as soon as 18 months.
See how tellurium price has skyrocketed recently:
www.asianmetal.com/Met...
You need to read my latest article on tellurium:
seekingalpha.com/artic...
In it there is a tellurium price chart showing recent explosive rally, basically it almost tripled in price in just three months. That kind of price rally should convince any one in doubt that there is indeed a global tellurium shortage going on.
The truth takes a long time to be learned by the populance. I plan to short FSLR again soon near its Q1 earnings release. I am encoraging every one who has question on tellurium to contact FSLR and demand a clear, specific and quantitative answer on their tellurium supply. So far they have kept their lips tight.
FSLR will suffer a cap on production unless they replace the technology.
Efficiency of Te based solar cells is 40% compared to others being 22%. Te supply is constant and not increasing wheras the applications are diversifying. Many factors are involved. Cant jump to any conclusions so early.
Not enough to power all of the world. But pretty good. In a good location (25 percent capacity factor) it's roughly half of US electricity use. At 1 dollar per Watt that's more than a trillion dollar market. Of course that's assuming all tellurium will go to CdTe solar. Which may not be a very good assumption. Also, I do agree that production can't be ramped up exponentially.
My conclusion is that it's a pretty risky investment but, as a potential energy source CdTe solar isn't ultimately hopeless.
www.mapsofworld.com/mi...
They talk about 1600 metric tonnes per annum as possible, enough for more than 10 GW per year if all of it would go to CdTe cells. Under these more optimistic assumptions about yearly production, it still won't be enough to transform the global electricity market.
nrel.gov/pv/thin_film/...