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Chipmakers' silicon scraps feed solar industry's hunger

Selling unusable silicon wafers to solar cell makers is good for the environment, and companies like TI make money at it too.

Texas Instruments is finding millions of dollars in the garbage.

The chipmaker historically had sold its scrap silicon wafers--those wafers that, for one reason or another, can't be used to produce chips--at garage-sale-like events near its Richardson, Texas, headquarters. A 55-gallon drum of old wafers might have gone to a local hobbyist for $100 or so, according to Mike Hayden, the silicon procurement engineering manager at TI.

But as demand for processed, high-grade silicon substrates began to escalate in 2004, TI re-examined its policies and started selling its scrap wafers to makers of solar energy gear.

Now, the company sells about 1 million scrap wafers from its fabrication facilities in Texas, Germany and Japan to the solar industry, where they get converted into solar cells. Revenue from the program comes to around $8 million a year, Hayden said.

"The decision is to either throw them away or recycle them," he said. "One of the major priorities for us is to make everything as ecologically friendly as possible."

Next, TI will expand the recycling program to include scrap silicon from its testing and packaging facilities in Taiwan and elsewhere. It is also looking at ways to extract and recycle silicon out of the water used in its manufacturing processes.

Intel and Advanced Micro Devices have similar programs. Intel says it sells about 1 million scrap wafers to the solar industry a year.

The term "scrap" is a bit of a misnomer. These wafers are made of high-grade crystalline silicon. Because the semiconductor industry requires slightly higher standards of purity than are required in the solar cell industry, the material can be reused for solar cells.

Some of the scrap wafers were used to calibrate the machinery for production, Hayden said. It might have been coated with metals, polished, and then sent through the same machine to fine-tune a process. After multiple rounds of testing, the wafers just aren't thick enough to be used in computer chips.

"Most of the wafers we can't use are too thin," Hayden said. If the wafers don't contain circuits, they can be taken almost as is and used by the solar industry. If TI patterned circuits on the wafer, it has to be melted down so the metal can be removed.

Right now, TI sells its wafers to customers in Germany, Japan, Hong Kong and India. German government programs to increase solar power created a boom market for solar panels, which in turn sparked shortages in 2004. New, similar programs have caused demand to spike in , the U.S., Spain and elsewhere. Although established solar manufacturers like Sharp have long-term buying contracts that insulate them from some of the price increases, smaller, newer companies have had to look for silicon in a lot of places, according to analysts and solar executives.

Thus, TI doesn't have to seek out buyers, Hayden said. "These guys are seeking me out."