REC Silicon ASA

OSE:RECSI

Earnings Call Transcript 2020-Q4

[Tore Torvund, CEO & President]

Good morning, and welcome to the presentation of the fourth quarter for REC Silicon. We are all today -- I'm Tore Torvund, President and CEO of REC Silicon. And we are all today in the U.S. So I have brought my colleagues to this presentation, so you can listen to their view. These are mainly the people responsible for the different areas we are going to present today.So let me start, let's say, I will present the highlights, James May financial reviews. Can you go back one? Kurt Levens, responsible for our Butte operations will take Silicon Gas. Francine Sullivan and Chuck Sutton will give an update on the PV market. I will come back with a short update on Yulin. And Francine will then cover the battery update.Next. The highlights for fourth quarter. We had a revenue of $36 million and a positive EBITDA of $1.9 million. The cash balance is today, $134.9 million, and we have a cash increase of $99 million, mainly due to the private placement of NOK 1 billion, which was done in October, and the cash outflow from operating activities was $2.8 million. A very positive development we see on the silane silicon gas volume. It was 881 metric ton compared to 746 in Q3. And this is one of the strongest quarter we have on silicon gas. And Kurt Levens will cover all the details there. A minor reduction in the gas price of some 2.8%. Also, on the polysilicon side, we are very satisfied with the numbers. And we sold 250 metric ton of high-quality polysilicon to the semiconductor industry. I think we have already covered the private placement of equity in October, but that is, let's say, what was in this quarter. On the solar material, as we are not into this market, as you know, due to the fact that we have still this trade war going on between China and the U.S. But we see now that there is definitely a very good balance between the demand and supply of polysilicon. And it is also expected that the demand for PV will continue to grow and that will definitely then need more polysilicon to be brought online in the near future. Also, we will give an update on the battery development. There is a high level of interest within those who are working with the silicon anode side. And we are talking to several companies. And as you remember, we have an MoU ability Group 14, and Francine will also cover this part of it. On the Yulin JV, we have decided to write-down the investment to 0 in our book. It is very difficult for us to follow-up due to the fact that I have not been to China or no one has been to China now for more than a year, and it is very difficult to communicate with our partner in China, and we get the limited insight in their activity.What we know is that we know the production levels. We know that we have very high-quality FBR product produced. In fact, we have also received some of these products here in the U.S., and we also see that we have achieved the design capacities for this facility. But due to the fact that we have limited insight and influence, we have decided to write-down our investment in China to 0, and James will cover that in more detail.Okay, then I hand over to James for the financial update.

[James A. May, Chief Financial Officer]

Thank you. Good morning. Total revenues for the fourth quarter were $36 million, which represents an increase of approximately 19% compared to $30.3 million in the prior quarter. The increase in revenues, as Tore indicated, can be attributed to strong sales performance in the Semiconductor Materials segment, which I'll discuss in a little more detail in a few moments. Total EBITDA for the quarter was $1.9 million compared to $17.9 million for the third quarter. Recall that during the third quarter, the results included a $16 million noncash adjustment due to the settlement of the property tax dispute, which leaves $1.9 million of clean EBITDA in the third quarter, which is the same as the EBITDA that we're reporting for the fourth quarter. This represents the fourth straight quarter of positive EBITDA the company has reported and results in a positive EBITDA of $23.8 million for the full year, which was achieved in spite of a very challenging business environment and was a result of reduced spending in the Solar Materials segment, and more importantly, due to continued strong results in the Semiconductor Materials segment, which is highlighted on the next slide. Next slide. As you can see, revenues in the Semiconductor Materials segment have increased steadily throughout the year from a low in the first quarter due to seasonality and uncertainty caused by the COVID-19 pandemic to $35.9 million in the current quarter. This increase in revenues compared to the third quarter is a result of higher sales volumes of both silicon gases and semiconductor grade polysilicon. While total polysilicon sales volumes within the segment decreased from 401 metric tons during the third quarter to 338 metric tons in the fourth quarter, sales volumes of the semiconductor grades of polysilicon increased from 174 to 250 metric tons, which resulted in an overall increase of 37% in polysilicon revenues compared to the prior quarter. Overall, average prices for polysilicon sold increased substantially due to a high mix of semiconductor polysilicon compared to volumes of solar grade polysilicon. Average prices for semiconductor grade polysilicon declined slightly due to mix as well. However, prices within the specific grades of semiconductor polysilicon increased from 5% to 15% during the quarter and compared to last quarter. Silicon gas sales volumes increased from 746 metric tons to 881 metric tons, while average silane prices declined from 2.8 -- by 2.8%. EBITDA contributed by the Semiconductor Materials segment was $11.7 million for the fourth quarter compared to $7.3 million in the prior quarter. So I've already indicated, the increase in earnings can be attributed to higher sales volumes. Next slide. Revenues within the Solar Materials segment were $100,000 and represented small sales from the remaining granular polysilicon inventories. EBITDA contributed by the Solar Materials segment was a net expense of $2.8 million, which is in line with prior quarters, excluding items of other income such as the $16 million that we've already discussed that occurred in the third quarter within this segment. Other and Eliminations were a net cost of $7 million and were $3 million higher than the previous quarter due to changes in estimates to arrive at accrued liabilities at year-end. Next slide. Cash balance, as Tore indicated, increased by $99 million during the quarter. As we've indicated, the main reason behind this large increase is the private placement of equity that was completed in October. Our cash flows from operations -- cash outflows from operations were $2.8 million and consisted of inflows of $1.9 million from EBITDA, $400,000 from a decrease in working capital invested, and these were offset by interest payments of $8.5 million and a $1.1 million contribution to the defined benefit pension plan in the United States. In addition, we've benefited from a currency gain of approximately $4.6 million due to the impact of a weaker U.S. dollar relative to the NOK on large cash balances denominated in NOK following the private placement. The majority of these proceeds from the private placement have since been converted to U.S. dollars to solidify this gain in terms of U.S. dollars. Cash outflows from investing activities were $800,000 and consisted capital expenditures of $400,000 and an increase in restricted cash balances of $400,000. Cash flows from financing activities were $102 million. This was the private placement of $105 million, offset by payments of the lease liabilities of $500,000 and the payment of principal on the property tax note of $2.8 million. Total cash balances increased by $99 million to a balance of $134.9 million on December 31 of 2020. Next slide. Nominal debt decreased by $800,000 during the quarter to $220.6 million. Change in nominal debt is due to a $400,000 repayment of lease liabilities. Recall that on the last slide, I said there was a $500,000 change, there was also an increase in lease liabilities due to modifications of leases. The $2.8 million decrease in the property tax note, and these were offset by a $2.3 million increase in the indemnity loan due to the change in currency. Nominal debt decreased by $99.9 to $85.7 million. This was the $800,000 change that I just discussed, plus the $99 million increase in cash. With respect to the indemnification loan, claim was filed in the District Court here in Norway November 13 of 2020. REC intends to defend this cause of action and the status and the timing of the indemnification loan continues to be subject to uncertainty. I now yield the presentation to Kurt Levens to speak on the Semiconductor Materials business.

[Kurt Levens]

Okay. Please advance it. So first, I'd like to talk about our electronic grade polysilicon performance in Q4 of last year, what the primary drivers were for that. As had been mentioned before, the market for semiconductor devices has been tightening. And to some degree, there's been some headwinds as a result of inventory that had built previous to that in both the polysilicon and the wafer space. However, as a result of continued tightening of demand for the end user devices, we've seen that there is starting to be higher utilization in Q1, that is what is historical. And as a result, customers preparing for operations to continue during the Lunar New Year, which gave us some buoyancy in terms of our shipments. It was, in fact, the strongest shipment quarter we've had since 2018. For 2021, the demand picture is starting to firm up. Q1 will be seasonally lower as it is every quarter -- every year, I should say. And there's strong potential for quarters to continue to improve throughout the year in terms of our shipments. In addition to that, customers are considering increased demand scenarios, which, in fact, are mainly geared towards the second half of the year, depending upon how long the continued tightness in the market lasts. Next. Silicon gas shipments were also up in Q4. One thing to note between the silicon gas supply chain and the polysilicon supply chain is that when it's functioning normally, in the silicon gas supply chain, there's less inventory. So therefore, the response mechanism between demand signal and our ability to fulfill it is, in general, much quicker. And we started to see that because semiconductor remained at a high utilization through Q4 and surprisingly flat panel display did as well that had started in Q3. It had started in late Q2 and sustained through Q3 and surprised everyone by continuing on through Q4. So that also gave some increase in terms of our shipments. One thing to note is just a point of the ongoing challenges that were rocked by COVID that after things recovered and with COVID mitigations in place, we are finding that the cycle times logistically are starting to increase on ocean freight. It's something that's we're monitoring and have developed plans to mitigate any effects. Currently, Q1 is firming up to be stronger than a normal Q1 period in terms of shipments. I'd also like to point out that silicon gases, as we define them, also include several other gases. They are specifically meant for advanced process nodes and integrated circuits. And the demand for these continue to increase. These are products such as DCS, MCS, disilane. And they -- not only do they continue to increase to service these advanced nodes and investments, but they're increasing in share of our overall shipments as well. We expect that trend to continue over the midterm to longer-term of 5 years, and we will need additional capacity to continue to meet our customer growth. Next. So I've talked generically about our products. We always report them as electronic grade polysilicon or semiconductor polysilicon and silicon gas products. Well, what does that mean? Well, for us, it all starts with silane. From there, we make a solid form of silicon, specifically in our case, Float Zone polysilicon is our target. We also produce some electronic grade, high-purity Czochralski or CZ silicon. Gas wise, we sell the silane into the marketplace as well as disilane, which is derivative of silane, and our purified monochlorosilane and dichlorosilane, which are intermediates in our production process. So when we talk about silicon gas products, those are silicon gas products. When we talk about polysilicon electronic grade, those are the products. Next. And how are these products applied? Well, our float zone polysilicon goes into float zoning, it's a process to make a single crystal ingot and its primary target is the power semiconductor market. This is a large driver and utilized in high-voltage distribution systems, IGBTs or transistors for electric vehicles use high-purity float zone, valve stations for large distribution systems and on and on and on. Czochralski silicon is the workhorse of the semiconductor industry. It's used for just about every form of electronics that you would imagine that go into your computers, your smartphones. This is the traditional semiconductor wafer that then the devices are built upon. Silane is used in chemical vapor deposition, which means that it's being deposited at very thin layers on top of the wafer in order to build the device, the microprocessor of the memory device, whatever sort of device it may be. Dichlorosilane, monochlorosilane, disilane also used in chemical vapor deposition, primarily targeted advanced semiconductor processes, but utilized in some standard semiconductor processes as well. Next. So also, I just thought it would be good to show you where our products are used in the entire semiconductor value chain. This is a very simple illustration. But our polysilicon is used in the front end to make the ingots that the wafers come out of. The wafers are then utilized in the front end of the fab where they build the device, and that's where they use the gases and the deposition. It's successive steps of lithography, etching, deposition, repeat, repeat, repeat as they build these transistors or other sort of devices as is required by the integrated circuit. Next. So a little bit about where we are right now and how that translates to the midterm for us. First, the chart on the left demonstrates quarterly IC unit volume shipment. And you can see that it reached a high back in Q3 of 2018, at which point, it started steadily down. And this is what the headwind we've been fighting for the past 2 years is that it went down and then before it was able to tighten up, we had to go through COVID. Now it's returned to a trend line that is portraying the potential for continued growth over the next few years. But this is just where we're at right now for this year. What's driving that? Aside from the issues around the temporary supply situation and then the COVID-related situation, it's about content and electronic systems. Semiconductor content in electronic systems has grown and is forecasted to continue to grow. So what that translates into on the next slide, next, is that overall, semiconductor unit growth is expected to grow 6% compounded annually growth rate over the next 5 years. And semiconductor unit growth is primarily driven by wafer throughputs. Yes, there's other factors as well. But wafer throughputs are easily more than 80% of the driving factor. And what this means is that the more wafers that go through the process, the more polysilicon they need to make those wafers. The more wafer starts there are, the more deposition there is on those wafers. So it drives both parts of that business for us. Next. How we've worked to make sure that we're aligned to be able to take care and to take a good strong position going into this growth curve has been to make sure that we are supplying the top manufacturers in the semiconductor industry. All of the -- 100% of the top 15 are supplied by us with our gases. And why that's important is because in the industry now, the largest capacities and the largest investments in new capacities are coming from the concentrated players at the top. In addition to that, investment in new advanced processes are also coming from the players at top. So our alignment with them is key. Next. And on top of that, no matter where they locate, we have the ability to supply them. If you looked at over on the far left, when you see these regions by installed capacity, we have #1 market share to supply silane in all of the regions, except for one. And in that region, we're #2. Next. I mentioned about advanced semiconductor processes as well, and this is what's driving those other gases in our portfolio. It also drives silane in the advanced semiconductor processes, some of them silane is used up to 30% more per square into silicon than it is in more traditional processes. But more importantly, on our other gases, dichlorosilane, monochlorosilane and disilane, that growth is driven by adoption of advanced processes. And when you look at the future over the next 5 years, the movement towards advanced processes, those nodes that are 20 nanometers and less is going to be greater than the growth for the traditional processes. So we position ourselves with the right customers. We're in the right areas, and we have the right portfolio to take advantage of this. Thank you.

[Tore Torvund, CEO & President]

Next. Thank you, Kirk. Then we move over to the solar market and Francine will start out, and then Chuck will continue.

[Francine Sullivan, Vice President Business Development]

Good morning, everyone. So the most significant development in relation to the outside of China solar value chain in the last months has been the election of the Biden administration, who has been elected on a policy platform of green energy transformation. Biden campaigned heavily on decarbonization of the economy and deployment of significant amounts of renewable energy, including solar. Biden also has heavily emphasized repeatedly the importance of Buy America, and has recently taken action in that regard and on the importance of creating high-paying domestic manufacturing jobs. Both Biden's people and himself are talking about making things in America at this time. This point was emphasized recently by the new Head of the Department of Energy in the United States, who repeatedly talked about making solar panels and other elements of renewable energy in the United States. We don't have specific policies yet. They're still under development. The administration is still getting into place. Senate confirmation hearings are ongoing as are political appointments. The discussions are ongoing in relation to how those policies are look -- should look and we expect them to form part of future stimulus packages, which are anticipated to come out within the next year. So with the election of the Biden administration, we have both the U.S. and Europe, 2 of the world's major economies, set to take action to support renewables and to support a domestic supply chain in relation to renewables. And this is very positive towards the outside of China solar value chain. Alongside this, there is a growing focus on the importance of the sustainability in this whole supply chain. And this is coming from both buyers and developers. Companies that are buying solar panels are looking to reduce their CO2 emissions. And one very effective way to do that is to buy solar panels with a low-carbon footprint. We're also seeing the growth and strengthening of the low -- Ultra Low-Carbon Solar Alliance. Which is a group of outside of China manufacturers who are all prioritizing green energy processes and reduction of carbon in their production processes. And it has been very effective at amplifying the fact that there are there is an alternative solid value chain available and it does look into reduce structure emissions should be looking to procure from the supply chain. With that, I'll hand it over to Chuck.

[Chuck Sutton, Vice President of FBR Polysilicon Sales]

Next slide. Good morning. Going into more detail on the PV market outlook. You can see on the chart on the right that installation forecasts are projected to continue their strong trajectory growth. Looking at 2020, the first set of bars, while all the numbers have not been finalized, it appears that even with the COVID-19 impact, it was another record year for total installations. With several climate announcements in 2020, both from countries and from global companies, the forecast for solar installations continue to be pushed up. In the past quarter, we've seen market analysts increase installation forecast between 30 to 60 gigawatts over the next few years. China is expected to increase installations over the next several years with 2021 projected in the range of 55 to 58 gigawatts. The U.S. saw a record installation in 2020 with around 18 to 19 gigawatts installed. The investment tax credit extension will increase installation rates in the U.S., and I'll cover that in the next slide. Europe also had a good year in 2020 with countries like Germany and Spain having strong installation numbers. With a low-carbon focus in Europe, it's expected that installations will be 25 to 30 gigawatts in 2021 and then average around 30 gigawatts in the following years. In the rest of the world, India was down in 2020, but is expected to recover in 2021 as part of their COVID stimulus work. Several smaller countries are increasing just from a few megawatts to hundreds of megawatts, and all that is adding more. And then more countries are joining that the gigawatt annual installation levels. While China is increasing installations, the demand outside of China continues to grow, with the U.S. and Europe, running about 50 gigawatts annually installed going forward. Now looking at this growing market, along with the low-carbon desires, the desires for shorter supply chain, there is growing support for an outside China value chain. Next slide. Focusing on the U.S. market. We can, again, look at the chart on the right, the small red line shows where the forecast for 2021 through 2023 was before the ITC extension was passed. The results of that passing was a jump in forecasted installations for this 3-year time period. Before, the installation forecast was very flat going forward. Now the overall effect is about an additional 15 gigawatts due to the ITC extension. Further out forecast have the utility market declining once the ITC expires, but expectation is that more support will come. The Biden administration has already signaled their support for renewables with the presidential executive order that gives directives on a clean energy purchases for the government facilities and leveraging the government buying power to support the President's Build Back Better jobs. The executive order also leads to further support such as the establishment of the White House Office of domestic climate policy led by the National Climate Adviser, which is a new position in the administration. We believe further increases in the forecast for the U.S. will be made going forward. Next slide. Here, we look at the PV pricing for the past year. With the chart on the right, you can see the impacts of the COVID-19 with the price declines in Q2 of 2020. Then in Q3, we see the sharp increase due to some incidents at China polysilicon plants. Price has been stabilized in Q4 as those plants recovered, and prices started to rise again as demand increased going into 2021, and it continues to increase. With the higher installation forecast, along with the expected expansions of the ingot wafer cell and module capacity, we expect the market for polysilicon to remain tight and balance for this year and potentially next. The pricing movements throughout 2020 and leading into 2021 supports the investment need for supply expansion of high-quality polysilicon. There are plants outside of China available to support that now. And with that, I will hand it back over to Tore.

[Tore Torvund, CEO & President]

Thank you, Chuck. Then to give you a short update on the Yulin JV. Next. You know all the characteristics for this. This is a state-of-the-art FBR facility, 19,000 metric ton FBR-B granular, 300 metric ton of Siemens and 500 metric ton of silane. As I said in my first presentation, we are, let's say, over the last 12 months have had limited insight on what's going on, on this JV. The fact that we had to take all our American specialists back to the U.S. in January last year. All the communication issues we have sitting in the U.S., talking to our colleagues, our JV partner in China has meant that we have limited insight, but also it is limited how much assistance we can give to them. And they still need a lot of assistance from our specialists here in the U.S. It has also been some dispute over the payment. We decided not to make the payment of $4.7 million, which was due by the end of 2020. And the reason why was that was outstanding invoices from our side, which was not paid by the Yulin JV, mainly for the technical systems we then give them from the U.S. And to be then on the, let's say, accounting-wise on the right side, we basically have decided to write-down our investment in Yulin to 0. It is also based upon the fact that there is, let's say, the operations of this plant is not according to standard. We are operating less than half capacity. And it just show that, let's say, they need a lot of decisions to be able to do tremendous or an operation, which is on an excellent level. And as I said, we -- it is very limited what we can do from the U.S. and also, we see that they accumulate debt supported by their company, Youser Group, which is then the 85% owner of the plant. So that's why we have written it down. It doesn't mean that we have -- we don't we definitely would like to continue to be a partner over there. But hopefully, it will be improved opportunities now in 2021 so we can start to send our specialist over again to help out on the operations side in Yulin. And then we have given the numbers for Q4. And the interesting thing is at least that in Q4, they made more FBR granular than what they have done in any previous quarter. And also, the quality is high-standard quality, which is now used by the largest mono wafer companies in China. Next. And then I will hand over to Francine, again, to discuss the battery opportunities we are working with.

[Francine Sullivan, Vice President Business Development]

Okay. So the electrification transition is really picking up pace across the global economy. We're seeing momentum in all aspects of the battery and EV industry, and this has really picked up in the last couple of months. Not just new entrants into the EV space these days, we've seen some major moves by the incumbent automakers even in recent weeks. Ford announced a couple of weeks ago, it would start making significant or really ramp up its EV investment significantly. And GM, of course, has announced that it will be all-electric by 2035. And these are really, really big moves and really important for the electrification transition and the move to EVs in a global economy. Alongside this, the Biden administration has emphasized the importance of EVs in its decarbonization goals. And of course, the importance of a domestic battery supply chain for making those EVs and the important components. We're also seeing significant investor interest across the EV and battery sectors. So the relevance of all this for REC Silicon is silane is a next-generation battery material and silane is the preferred source of silicon for next-generation silicon anodes. Next-generation silicon anodes using silane are achieving 20% to 30% increased performance and some are even achieving a 50% increased performance within time. So these batteries, because these batteries contain silicon anodes, it's a much better value than the batteries containing traditional and old material, which is graphite. Specifically, the advantages of silicon anodes are improved energy density, they reduced factory weight and costs, and they unlock currently redundant or unused cathode capacity. They increase the power acceptance of batteries, allowing faster charge and longer range. Advanced silicon anode materials containing silane are also a drop-in solution to replace graphite. So there's no need for major changes in manufacturing for battery makers to start using these kind of materials, which is very, very important for market acceptance. Next slide, please. So we are continuing our cooperation with Group14. We have the MoU in place, as you know, and G14 is without a doubt, a silicon anode leader. G14 is planning the first commercial scale silicon anode manufacturing plant globally and it plans to build this 12,000 metric ton plant co-located with REC facility in Moses Lake. The plant is expected to break ground in 2021, and REC Silicon will supply a silane via pipeline to this facility. And we'll work together with Group14 to develop the pipeline infrastructure. Currently, Group14 has a pilot plant installation underway at our facility in Moses Lake. Group14 anticipates entry into the EV market in 2023 and that its material will overtake less sophisticated, but the currently prevalent silicon anode material by 2024. Next slide, please. REC is very well positioned to supply the growing silicon anode market globally. We are currently supplying silane to several of the leading players in addition to G14, and we are having continuing discussions with these players in relation to ramping up supply in the future. Large quantities of silane are forecasted for battery and EV demands over the coming years. And as these companies scale up production, it simply will not be practical or economic to use silane in cylinders or in containers. It will be necessary for companies to co-locate with silane production. The reason for this is that the current silane distribution network or available container capacity is only around 7,000 metric tons. And in order to scale up or to increase that capacity, it is very, very expensive. It's about $30 million per 1,000 metric tons. Additionally, reliance on containers requires substantial OpEx on the part of the user. And this OpEx would relate to loading of modules and maintenance as well as freight and logistics. So we do anticipate supplying companies that are focused in this space through co-location in future and the diagram shows how a co-location would work with REC. Thank you. And with that, I'll hand over to Tore.

[Tore Torvund, CEO & President]

Thank you, Francine. So next. So basically, we feel that REC is well positioned in this the energy transition. And the core feedstock for doing this is our silane. Silane is the purest silicon you can get. This SiH4. So it's only silicon and hydrogen. And we are using this silane today in the semiconductor market. And as you know, we are, by far, the largest, let's say, silicon gas provider to the semiconductor industry. 70% of the market is covered on a global basis from Butte and 2,200 metric ton is what we have delivered this year. So definitely, let's say, we are a leader on, let's say, delivering silane to semiconductor. Silane is also the feedstock for our high-purity float zone polysilicon, which is the purest polysilicon used on -- in semiconductor, and there is only one competitor to that purity on a global basis. So Butte is doing well, very well in the semiconductor industry. We also have some investment opportunities which will be hopefully achieved or done during 2021, which will further improve our competitiveness in the semiconductor market. A stable EBITDA around $35 million in 2020. And we, as Kurt said, we are very optimistic concerning the semiconductor market in not only the short-term, but also on the long-term. Silane is also used for making polysilicon for the solar market. Unfortunately, due to this trade war between China, we have been shut down now for 18 months because there is no customer for our solar production outside of China. And since we have a duty today, which is 57%, plus 25%, there is no way we can get access to the Chinese market. Hopefully, that will change. But the new administration here in the U.S. is presently reviewing their political, let's say, situation with China. So it is definitely on hold for the moment, but we don't know if phase 1, which was signed with the President Trump, a year ago, still will be in place or if the Biden administration will change their view on what -- or the opportunity to find a solution with China on this trade war. In Moses Lake, we do have 18,000 metric tons of capacity. It's not a large capacity compared to the global demand, which is now approximately 500,000 to 550,000 metric ton. But as you saw from Chuck's presentation, the polysilicon price in China now is $12 a kg. If we were able to get access, we would have a profitable production out of Moses Lake from the FBR. And as you know, FBR is a very efficient way of making polysilicon, but you need silane, you can't use other feedstocks, if you would like to do FBR. And alternative, if there is going to be built new polysilicon capacity outside of China, we still have the IP for the FBR technology everywhere else than in China. And remember, this technology was back in 2014, the Chinese paid $200 million to get access to our technology. So solar is very attractive. It seems that there will be a tremendous growth in solar, and that means it needs to be built new capacity. So we are now working on this non-Chinese value chain as an alternative to an open up between China and U.S., and we can get access to the U.S. -- the Chinese market. The new thing coming up is definitely the batteries. It is very attractive. What these batteries companies are telling us, you might improve the efficiency of the batteries by 20% to 40% by adding silicon to the anode side compared to graphite, which is in all batteries as of today. we have 25,000 metric tons of silane. We are the only one having silane capacity outside of China. So either you come to Moses Lake or you have to go to China to get silane. As Francine said, we have several battery companies competing and discussing with REC to get access to these silane. And definitely, we are in a very good position since we already have invested $1.7 billion to build our silane and FBR capacity and all this capacity is today idle. Also, what Francine said, let's say, these companies need to be co-located with where you make the silane because it's very, very expensive to move or to logistically to move large quantity of silane. So that's why we have to co-locate, if you would like to use large count quantities of silane. So we feel that we have, in fact, 3 very attractive markets we are working on. And the silane is definitely the key enabler for these 3 markets. Next. And then what we focus on this quarter in REC Silicon. Definitely, we have a much better financial position since we were able to get this NOK 1 billion from our investors. And we are now looking into and to make these opportunities to invest in new business opportunities, mainly in Butte on the semiconductor side is market, let's say, particularly within silicon gas, we are not able to deliver what is the demand out there. So -- and we didn't have the money to do these investments. Now we can do these investments, which then will improve further the opportunities in the semiconductor market, but we also will have to do some investments in Moses Lake if we decide to go into the solar PV market, with mono capable polysilicon. Besides that, we are working a lot to develop this non-Chinese PV value chain. We also have said we are talking to the silicon anode companies. And definitely, we are working with the politicians to see if we can get this trade war with China out of the way so we can get access to Chinese wafer companies. But that's the focus on the strategic level in REC. And definitely, the most important thing is to have good operations out of our Butte facility and to find ways that we can open up Moses Lake in a profitable way within the shortest time possible. So thank you so much for listening in, and then we have some time to to answer questions. And I don't know if Nils, are you going to select the questions we have gotten?

[Nils Kjerstad]

I can do that, Tore.

[Tore Torvund, CEO & President]

Okay. Yes, yes.

[Nils Kjerstad]

First question is, how do you see future market opportunities for REC? Will the increase be towards the battery industry or towards the PV market?

[Tore Torvund, CEO & President]

That's what we, let's say, are looking into. As we said, we have 25,000 metric ton of capacity. What I foresee, definitely, the battery market will be very attractive. According to these battery companies, we will have enough capacity to support approximately 2 million electric cars. And it depends how fast these new batteries will be developed and the -- and used in the EV industry. But at the same time, there is a lot of attractiveness also on the non-Chinese low-carbon footprint solar market. Let's say, solar is mainly used for reducing the CO2 emission, and it doesn't make sense to buy very, let's say-- buy solar panels which has been built by using coal-fired power, and that's where we can compete with the Chinese panel makers if focus will be to reduce the CO2 carbon footprint. So we are following both opportunities, and then we will see what is the most attractive from an economic point of view in REC Silicon.

[Nils Kjerstad]

Okay. The next question is, what can you say about the Moses Lake facility? The current situation there, especially with respect to the decision to reopen the facility?

[Tore Torvund, CEO & President]

As I said, Moses Lake has been now, let's say, idle for approximately 18 months. This is our major focus, and we have previously informed that we are working towards 2023 restart, and that is still our, let's say, goal. But we need to find customers and we need to see that it will be a profitable start-up, but our goal will be to be back in operations in 2023.

[Nils Kjerstad]

Okay. Related to that question, will the Moses Lake facility be able to produce mono-grade polysilicon?

[Tore Torvund, CEO & President]

Yes. As we know that, that will be possible because that's what we do now in China with our technology. There will be a need for some modifications as we have already informed about. But it is highly capable to produce mono quality and there's substantially less carbon footprint and a lower cost than all our competitors outside of China.

[Nils Kjerstad]

Next question is, can you comment on the recently announced changes in the Board of Directors and the involvement in the new Board members?

[Tore Torvund, CEO & President]

I think that's not to me to comment on. I look forward to work with new board. If they are going to be elected in March 4. So I have had -- we have had a very good relationship with the Board or the different boards we have had and we look forward to work with also the new board.

[Nils Kjerstad]

Okay. We've got 5 minutes left. So this will be the last question. Is the Board discussing any strategy to go all in on producing products for batteries? And what's the current status on Violet Power?

[Tore Torvund, CEO & President]

I think I already answered this. We are looking into both the opportunities in the battery segment, but also at the same time, we are looking into the solar market and the low-carbon footprint market. So as I tried to explain, we have a strategy to see if we can put together a portfolio for Moses Lake, which is generating the best return on our investment in Moses Lake. And the priority will be to do that as fast as we can, but we are dependent upon that we have firm contracts either on the PV side or on the battery side for as much volume of silane as possible.Okay. That was the questions. So thank you so much for attending this presentation, and have a good day over in Europe. Now it is midnight, or it is in Moses Lake. Thank you.