REC Silicon, a polysilicon producer for the solar industry, is keeping a watchful eye on the booming battery technology industry.
REC, which is headquartered in Norway but has plants in Butte, Montana, and Moses Lake, recently announced plans to reopen its Moses Lake facility, which had been dormant since 2019. Battery technology companies Sila Nanotechnologies Inc. and Group14 Technologies are both launching operations in Moses Lake in the coming years, and REC produces a gas called silane that is crucial to both companies' technology.
For REC's part, although the company can currently supply silane for the smaller scale required by Sila and Group14, committing to providing silane for large-scale ambitions like electric vehicles, which both companies are eyeing in the coming years, will take more convincing.
"In order to build a plant, we have to have some additional assurance that we're going to have off-take. As these things start up, the worst thing we could do is isolate capacity to produce silane, build additional capacity to produce silane and then be sitting on an asset," said James May, CEO of REC.
May said if electric vehicles take off the way analysts expect, battery tech companies will need "several additional silane plants built somewhere in the world in order to meet that demand."
He added that REC doesn't need a firm contract and there is always risk in these decisions, and REC will decide how to invest in silane production based on Group14 and Sila's future plans. He said most talks with battery tech companies have been preliminary, and REC has talked to Group14 the most.
Group14, headquartered in Woodinville, and Sila, headquartered in Alameda, California, make a silicon-based powder designed to replace graphite in batteries. According to the companies, its powder can drop into existing manufacturing lines, and the powder can improve energy density.
Group14 raised $400 million in May, while Sila raised $590 million last year. Group14 is building a facility in Moses Lake slated to open in the second half of 2023. Sila bought a more than 600,000-square-foot facility right across the street from REC, and it plans to start production in the second half of 2024 with full production starting in the first half of 2025. The company announced the purchase in May.
Gene Berdichevsky, Sila's co-founder and CEO, said for now the company receive its supply of silane from a variety of sources, including REC. As Sila grows its production, however, he said Sila will need to get silane from across the street or make its own.
"It's not an accident that us and Group14 ended up there," Berdichevsky said.
REC, meanwhile, was forced to shut down its Moses Lake plant, which was heavily focused on the solar industry, in 2019 as a result of tariffs from the trade war with China, according to May. The company got a major investment from the South Korean manufacturing company Hanwha Corp. earlier this year. REC announced in May it would reopen its Moses Lake facility, with first production coming in late 2023 and full production coming in 2024.
The facility in Butte was able to stay open, May said, because the plant primarily makes semiconductor materials and didn't sell as much into China. He added that Hanwha plans to make an end-to-end solar supply chain in the U.S. REC currently has about 75 employees in Moses Lake, but May said REC will hire roughly 140 people when it restarts production.
"The majority of who we're going to hire is folks who are directly related to the operations of the plant," May said. "We're a pretty lean organization."
