Announced at market opening today, Solar Fabrik is doubling its annual production capacity to 30 MW due to a strategic purchase of wafer trader Global Expertise Wafer Division Ltd. (GEWD). By purchasing the Malaysian company, Solar-Fabrik AG is aiming to insure a supply of solar wafers exceeding 30 megawatt (MW) for 2006.

At the time of writing, the market responded favourably, pushing Solar Fabrik up by just under 10% to EUR 11.75.

Ensuring a supply of solar wafers is a big deal, because there is an enormous supply bottleneck. That's because the silicon wafer market has not kept pace with the demand for solar panels these last few years. Solar Module manufacturers used to be able to use the cast-offs from silicon chip manufacturing. However, in just a few years, chip manufacturing has become so efficient that there isn't much silicon left over. This plus compound growth of 30% a year in solar PV production has helped push up the price of high grade silicon from $9 per kilo to a forecast $60 this year.

So it's easy to see why companies like Solar-Fabrik are reaching back into the supply chain.