Gotta be a record: solar startup Twin Creeks holds firesale months after launch

UPDATED: A little over half a year after going to market with its solar wafer making machines, venture-backed Twin Creeks Technologies has sold its core intellectual property, assets and equipment for a meager $10 million to GT Advanced Technologies (s GTAT), GT announced Wednesday.

The demise is a sad end to a startup that was founded in 2008 and had raised $93 million as of March this year, when Twin Creeks said it was launching a piece of factory equipment that could slice off silicon wafers in 20-micron thickness, compared with the 200-micron wafers that are common today. Silicon wafers are used to make solar cells that are then assembled to make solar panels.

Being able to use the same amount of silicon to make more cells means a cut in capital equipment cost, which is measured in cents or dollars per watt. Putting the machine, called Hyperion, to work could reduce the capital equipment expenditure of making solar panels by 50 percent for a vertically integrated company (a company that makes the silicon, the cells and the panels) said Siva Sivaram, CEO of Twin Creeks, back in March. Using Hyperion in a large factory — that  means 100 MW of annual production capacity or more — could lead to a cell production cost of 40 cents per watt, he told us.

Twin Creeks’ investors included Crosslink Capital, Benchmark Capital, Artis Capital Management and DAG Ventures.

Twin Creeks is one of many startups and established solar companies looking at ways to use less silicon to make solar cells. While the price of solar cells has fallen quickly in recent years thanks to an oversupply problem, prices need to fall even further to make solar more cost-competitive against power generated by coal or natural gas. The U.S. Department of Energy has been funding next-generation technologies in order to achieve its goal of bringing down the cost of building a solar power project to $1 per watt – without government subsidies – by 2020. Right now, large-scale projects built for utilities still cost a few times that, and smaller systems such as those for residential rooftops cost several times more.

Hyperion was Twin Creeks’ first offering since it decided to change its business plan from making solar cells and assembling them into panels to selling the equipment for making silicon wafers.

However, San Jose-based Twin Creeks apparently couldn’t manage to stay in business. GT said it bought Twin Creeks’ Hyperion technology and a bunch of patents in a private sale from Twin Creeks’ lenders. GT plans to hold a conference call tomorrow to discuss the purchase. GT said it bought Twin Creeks’ assets for $10 million and will pay more in royalties, which will be based how well GT can sell Twin Creeks’ technology. GT said it plans to bring Twin Creeks’ technology to the market in late 2014.

UPDATE: GT also has bought Twin Creeks’ office in Danvers, Mass., and some former Twin Creeks employees will now work for GT to commercialize the Hyperion technology, Sivaram told us by email.

The solar manufacturing sector has suffered tremendous losses in profits over the past two years because the supply of solar cells and panels has far exceeded demand. Dozens of companies worldwide have filed for bankruptcy, and some have been scooped up for cheap. The impact is particularly severe for startups that are trying to make the leap from labs to commercial production and sales and don’t have the strong financial muscle to endure the intense competition. Two months ago, Hanergy announced that it was buying MiaSole, a solar thin film maker in Silicon Valley, for $30 million.