In the first post of this series, I described how Dr. Richard Swanson, a professor of electrical engineering at Stanford University, founded SunPower and developed innovative, high-performance solar cells between 1985 and 2001. This post describes how a chance encounter with an old college classmate would forever change SunPower’s fortunes. And that semiconductor and solar cell production have little in common.

The Cypress Years, Part One: Semiconductors and Solar Cells

Cypress Semiconductor adopted solar energy in 2000 for its new headquarters, when solar cells were only 14% efficient. T.J. Rodgers, Cypress CEO, had been closely involved in evaluating the solar panels that completely covered the company’s roof. He knew that, despite extensive coverage, the solar panels only produced 33% of the facilities required energy, and it would take decades to return the initial investment. According to T.J., “The energy density of solar panels was not yet sufficient to compete with conventional energy sources.” Back in the early 2000s, having commercial solar panels installed on a roof of a building wasn’t the best choice. However, 10 years later, there are many great advancements in the industry that make having solar panels on residential and commercial property very attractive. Many find that finding a solar inverter supplier is easier than ever as the technology has developed to the point of real life viabilty. They can oftentimes also install solar panels, or even help create an off-the-grid system to compete with local power suppliers, thanks to the aforementioned improvements in the technology.

His encounter with his old college classmate at a Starbucks just before Christmas in 2001 would prove serendipitous. T.J. and Dick Swanson had been in the same Ph.D. program at Stanford. T.J. remembered Dick as, “one of the smartest men I ever met-a true genius.” Dick explained to T.J. that his company, SunPower, had created a 21% efficient silicon-based solar cell-50% more efficient than what Cypress had installed the prior year. But it was too costly to produce, and he was about to lay-off 50% of his workforce in advance of possibly shutting down the company shortly thereafter.

T.J. saw an opportunity to marry SunPower’s innovative solar technology with Cypress’s expertise in high volume semiconductor manufacturing. He initially funded SunPower with $750,000 of his own money to prevent the layoffs. Then he set about persuading the Cypress board of directors to acquire the company. In 2002, after several initial investments, the board finally agreed to acquire SunPower for $57 million.

Over the next few years, Cypress would invest another $86 million in SunPower. More importantly, the company would contribute skilled personnel, facilities and proven production and business processes to transform SunPower into the solar industry leader. The greatest challenge facing Cypress and SunPower was that semiconductor production was too costly and slow to produce cost-effective solar cells. As T.J. Rodger’s stated, “We quickly learned that a silicon wafer was about the only thing a semiconductor and solar cell had in common.”