Moment of Truth Live at Reindustrialize (ft. Mark Widmar)

So, we never let go of our roots. The sovereignty was really important to stay here in the US. And then as we scale and we got to more disruptive cost advantage, then we said we're going to scale here in the US because this is one of our primary markets. So, we've taken: we had one factory, which is what we started with here in the US. And now when we complete with South Carolina, we'll have created six factories here in the US.

Yeah, so it's about 15 years ago that I sold the First Solar. Yeah, I was working obviously in another machine tool and industrial industry and had previously been in a high-tech industry when I was with Dell during the '90s, a very exciting growing industry. And First Solar was starting to evolve at that point in time. So we were talking closer to 2010 and a lot of excitement. It was this unique company with this unique technology, right? Differentiated capability, disruptive in many different ways and focused on manufacturing, creating supply chains here in the US and abroad. So it was a great field for me and fits the culture, and something I was very excited to join the company 15 years ago. First as the CFO, then about 10 years ago I became the CEO.

Yeah, so we're basically a semiconductor company. That's what we are. A semiconductor sits between two sheets of glass and converts photons into electrons. But we do it in a completely disruptive way. We do it with a thin film processing that nobody else in the world has ever done. We're not going to be able to get it to scale and be competitive. And it's an advantage technology that can outcompete alternative sources of PV generation or semiconductors, which largely is an old legacy technology that was a very proud moment that this was created here in the US, but eventually evolved to be dominated by the Chinese. And unfortunately, it's really First Solar against China at this point in time. So there's the two technologies in the world. One is thin film, we're vertically integrated. You saw our factories. Everything that is manufactured in the four walls of that factory is to create a vertically integrated product that ships out the back end. That gives us an advantage in the advantage. So there's many, many attributes which makes me believe it's an advantage disruptive technology that we've been able to create. And also creates a platform for evolutions to continue to come and next generation technologies.

Yeah, so we started the company here in the US. Again, we're a technology manufacturing company. And the symmetry between those two is very important. So as you think through your advanced early stage development and eventually through advanced development and moving that into high volume manufacturing, having R&D co-located with manufacturing is a huge strategic advantage. So we always maintained true to that. Now, we have put factories outside of the US when there was such an objective of moving to driving the lowest cost of energy down for solar. Like most people, there was exploration that was done at that point in time to look to manufacture outside of the US. But we never let go of our roots, right? And the sovereignty was really important to stay here in the US. And then as we scale and we got to more disruptive cost advantage, then we said we're going to scale here in the US. This is one of our primary markets. So we've taken: we had one factory that's what we started with here in the US. And now when we complete with South Carolina, we'll have created six factories here in the US.

You know, so I grew up in a town South Bend, Indiana, which is not that far from here. And most people know South Bend because of the University of Notre Dame. But behind it, South Bend started off as really a great manufacturing company. There was a lot of industry in South Bend, going all the way back to Oliver Plow, which eventually became Studebaker wagons that ultimately became Studebaker cars. And then Bendix came there. So aircraft wheels and brakes and we had Dodge and Pull and Bendix and all these large successful industrial companies in. My grandparents and my aunts and uncles used to tell the stories about the factories and they're all gone. They're now mostly just shuttered up old facilities and broken windows. So growing up in that environment and experiencing that, it really informs your view of if you were ever in that position to give back, what would you do? So having the opportunity being the CEO of First Solar as we thought about expanding manufacturing, I said, absolutely, we're going to do it here in the US. And we're going to do it, we're going to innovate, we're going to do it cost competitively and advantageously, and we're going to thrive. We're going to continue to invest in communities that we've taken those principles and we've gone into communities, which makes me extremely proud. For example, we went to Alabama because the community that we're in outside of Huntsville was devastated about a decade plus ago with a paper mill that was shut down and all those jobs went to China. And it's largely been an economic depression for over a decade until First Solar comes. First Solar comes, we invest, we build a factory in outside of Huntsville. It's over a billion-dollar investment. And we hire about 800 associates for that facility. Average wage is about $80,000 for that facility. Now this economy in the community is thriving again. When we go there, which is a proud moment for us, when we go there and have a chance to interact with some of the associates, they tell us they're not, well, thankfully our first meeting and commitment and investing in the American worker. And that's what we're here today. Taking our technology, investing in the American worker, creating the domestic supply chain, creating the economic prosperity. So for me it just started with my upbringing and then continuing to push my team. I have a very talented team that how do we manufacture here in the US? How do we get cost advantage?

Yeah, so Perrysburg was another community that was kind of going through an industrial transition. And largely in automotive industry, the supply chain that sat in Perrysburg. And really the technology, the evolution of the technology was trying to find an alternative to use glass. So glass obviously was being used in the automotive industry, but they were trying to find other ways to use glass. And so this technology came in and said, well, we can deposit a semiconductor on top of the glass, that semiconductor can then create electrons. And so by doing that now we have an opportunity to invest in that community and glass is really important. And the glass industry largely has gone to China as well. So there's two different types of glass, more of a commoditized glass and more of a high-end glass. And all that industry largely has gone to China. So we made a decision to put a factory, our second factory in Perrysburg, Ohio. We needed a glass supply chain. And this was around 2020 or so. And we hadn't built a new glass facility in the US for 50 years. So we worked with our supply chain partner and we made co-investment with them to put a new glass facility, which is about a couple miles from our current facility. That therefore we could source that glass locally. The other thing that we've done is they also have one of the oldest glass facilities across the Ohio. A 100-plus-year-old facility that was largely mothballed. And we made investment to bring that back into production. And so we are getting glass from the oldest facility in the US and the newest facility in the US. And we basically buy about 20% of the glass that is made in the US. We're the largest buyer of glass compared to automotive industry or anywhere else. We buy 20% of that. Wow. And there is a certain part of that big credit for all of those jobs, too. That also comes back for solar. That's awesome.

Yeah, so we brought it to full scale in production around 2022. We started to actually make decisions to invest in it about 3 years earlier than that, but it's fully in production. It's operational and it's been scaled across all of our factories. And really it's taking the full entitlement capabilities of robotics, the full entitlement capability of you think about every tool that we have has some form of chip, some PLC associated with it. Taking those opportunities to leverage it to create digital twins so we can now optimize and do throughput analysis, yield analysis really out the factory in a digital environment and then implement that into a production environment. And so when you go out on our shop floor, shop floor is about 2 million square feet and it's highly automated. Automated guided vehicles for all material movement, conveyor belts moving product from one location to the next. The module, when it's put in production, it'll travel about 4 or 5 miles to its end destination and it'll be completed in about 4 hours. But when you look at the scale that we have across our factory footprint that we have, we make a module every 1 second. So somewhere around the world in about every 1 second there's a complete module that's coming off. And we do that with the highest standards around quality and reliability. Every module that goes through the production process, there's fusion cameras, track units, so there's even a stress factor in the glass which we then identify. Every module has its own kind of digital footprint associated with it and information associated with it near to how that module went through the production process. So it's really taking to advanced next generation manufacturing. There's not one person I bet everybody here in the room that can't see one of our factories, they're obviously generally close by. There's not one person who's ever left our factory that hasn't had a similar reaction that you did because it's really inspirational seeing what we can do here in the US and what next generation technology looks like.

Absolutely. And we're also moving forward to it because AI is a critical enabler of adding value to our production associates. So helping them do their job better. Not trying to replace their jobs, but trying to figure out how can they do their jobs better. So for example, if an operator is operating a particular piece of equipment, and there's some form of sensor that goes off, well, historically, we potentially maybe would have deployed a technician to come out and try to observe and determine what happened with that tool. Now, we empower the operator to determine what happened. AI tools can help them do their own kind of breakdown analysis to determine what's the root cause of the problem, and they correct it themselves. So there's huge empowerment aspect of this, and it's only going to get evolved forward. It's only going to get better as we go. And what you'll find is what's really cool about AI is that associates are using it at all levels across our company. It's opening their minds to new possibilities. Things they didn't fully comprehend before or understand what they could do and how they could be empowered. Now, they're like, 'Wow, this is such a powerful tool that I can use to help do my job better. It's improving quality, the performance of the product, and drive our costs.' And that's what our associates are trying to do.

You know, it's interesting because I don't know if I ever there's a profile that you could look at across all of our factories to say this is the standard profile. But it's the standard profile of the associates that we bring in that community. So if I go to Louisiana, a lot of the associates that we brought in from Louisiana are generally somehow tied to the oil and gas industry because that's what was there before. The community that we sent Alabama, a lot of those were rural, in some cases even from a farming community. And this kind of experience and background. But what we do is we find highly passionate, capable associates who want to learn, and then we invest a lot of time in training them. So we give them the skills of what they need to know and understand in order to do their job. We work very closely with the community colleges in particular, the universities in particular. So we're bringing some of the associates up early in their career, putting them through certain curriculums at our schools to help prepare them for the jobs that they would have at First Solar. In other cases, we're just bringing from the capability that exists already in the community, and then training and developing them to operate these tools. But clearly, the jobs are becoming more technical. But we also determined that with proper training, people can upskill themselves very quickly.

Yeah, so I think that we always like to say that we take a step back and if you think about it, our complete ecosystem, which we intentionally determined that we need to create an ecosystem here in the US and I already referenced the glass business. So you indicated that those are indirect jobs that are really there and enabled by us. The entire output of those glass plants goes 100% to First Solar. So when you look at what we've been able to do across the supply chain that includes steel and aluminum and plastics and different types of materials including copper and other things, we've created 40,000 jobs here in the US. That's what we've been able to do and we've created about $4 billion of annual payroll. And what we really are trying to do is when you bring it back to the AI piece of it, we're also trying to integrate those capabilities and create a seamless integration across the entire ecosystem so we can leverage each other's know-how and capability to drive more throughput and scale appropriately given the opportunities that we have in the marketplace. And they indicated this is not about how do we replace these jobs, but how do we upskill and how do we create capabilities that we need for next generation technology and how do we compete on a global stage? But we all know that China's out to dominate and really replace the US in terms of our supply chain and our capabilities. They would prefer that 100% of all of our critical strategic supply chains would resonate and be controlled in China. So we have to figure out how do we ensure that never happens. But what do I have to do to make sure that I can get on a level playing field where I can out-innovate and out-compete them? And so there is a huge component of technology with technology being able to buy associates and their vision, their passion, their commitment, and innovation and creativity. It all trickles down.

Absolutely. There's absolutely no doubt about that. And I indicated the passion, the power, and the insights that it has given to our associates has made them significantly more productive and actually significantly improved their engagement in terms of wanting to come in every day and contribute, right? And to win. And that's really what it's about. How do we win?

And unfortunately, the crystalline silicon was an alternative technology to us. Unfortunately, it really lost its way and it gave up. It wasn't that it was out-competed. It just gave up and it handed its technology and its supply chain to China. And China also had, as part of its five-year strategic planning process, this was an industry that it wanted to dominate. And so it was very willing to take it. And then what ended up happening is that not just the technology has gone there, the manufacturing capacity has gone there. The tools that are needed to manufacture the product, the supply chain that are needed, the entire ecosystem has gone to China. If you look across parts of that supply chain for crystalline silicon, again, we work completely different. Our technology sits outside of that. In some cases, 98% of the supply chain is controlled by China. And almost all the tools that are needed to manufacture the product are really sitting in China as well. So they control what I like to refer to as that on-off switch a little bit. So they can make decisions. And it's really a weird evolution. And segueing into this as well, when solar was first around, and even wind, you had this broad liberation that everybody had access to. So instead of being dependent upon natural resources within the country that you have, being blessed by having natural resources that can enable energy's long-term energy independence, solar wind sort of is available for everyone. China now has taken it and turned the game around. They control the switch. And on the crystalline silicon side, if they don't want to export the materials, or export the tools, or give the IP, you can't do anything. You have no sovereign control anymore because China is now in that position. That's the vulnerability that has been created with the silicon side. We've chosen never to get close to that. We've never given them our technology. We've never given them our ecosystem as it relates to our supply chain or our tools which are manufactured. We've kept control of all that, so we created and enabled our independence to not be encumbered by them.

Yeah, it's absolutely possible. You have to have the commitment first. And I'll list two countries that are trying to move in that direction right now. One is the US, obviously, I'll talk about that. The other is India. India has done the same thing, they're concerned about their over-reliance. And so they're trying to enable and create their domestic industry. And that's what it is, it's a commitment. And then you also have to have strong enforcement. So there's no reason that we can't have our own domestic industry here. Today, we supply about 50% of the demand for the US market. And we have not only today's technology, but next generation technology that is superior and competitive advantage anything crystal silicon can do. But there's that commitment and then there has to be a level playing field. Once you give us a level playing field, we'll thrive. We know that, we've demonstrated that. But the problem is that the Chinese, they'll continue to find ways to circumvent that level playing field. And what we need to make sure is once you create a level playing field, that there's enforcement. And I love the fact that the fundamental principles of the capitalist model, as I said, I love it. Economic prosperity, return on capital, technology evolution. The problem is sometimes others aren't always aligned to the objectives of ensuring the solvency of your supply chain. Some people feel like I just have an American address and I get everything from a supply chain independently from China and I circumvent the standards and the requirements. And that happens today, unfortunately, and it pisses me off. It really gets under my skin. And our government isn't always there to stand by and enforce that. And those should not happen because we need to have our own long-term capabilities here, and it has to be true capabilities, not tied or dependent upon any portion of the supply chain or any adversary country.

And what we like to do is take drill, baby, drill and turn it into building, baby, build. It's about building. And we are in a race right now, in particular around AI. We're behind a little bit as it relates to our grid, which is not as safe as it needs to be to enable the generation of the load that we see. And we don't have enough electrons. China's ahead of us in both regards. We need electrons. We need to build, baby, build. We need to win the AI race as an example. We need to reindustrialize. All that needs to happen here in the US. None of us want to be vulnerable. Think about what happened with China controlling magnets as an example. Almost completely shut down our own industry because they made one decision. They turned the switch off. And they're not going to supply, and then it becomes even a small component like that can completely undermine our automotive industry. So we need to have those abilities and capabilities here in the US. So build, baby, build needs to be there. Electrons are needed. Solar has very compelling value prop. It's kind of like we need an all-of-the-above energy strategy. We shouldn't be disparaging any type of electron because we need more of them. We need to get them onto the grid. And it's kind of like looking at the various branches of military. You need the army, you need the navy, the marines, they all work together, they all complement each other and they all add value. And if you think about what a utility wants, first off, they have an obligation to serve and they want reliable affordable power. Solar's fastest to build. It's the lowest cost form of energy and it is extremely reliable. I understand that the sun goes up at 7:00, it goes down at 7:00 p.m. During that period of time, highly reliable, predictable. And by the way, with the integration of batteries, now you can use that as a dispatchable into the evening hour. But that's just a part of the overall stack. Natural gas plays a role. Nuclear will play a role. Wind will play a role. Geothermal will play a role. You need that element of diversification. You need more electrons and then you need to optimize that to best serve the load requirements at the lowest possible cost.

So, the average customer really is pretty much all utility scale. And if you look at these, these are very large solar projects that are being built generally in more remote locations. A lot of our either grid connected to or behind the meter, especially for the day of service. So we're starting to see now because the grid is a constraint, one of the things you can do now is you can co-locate the generation. In some cases you have a hybrid system where some of it's grid power and some of it's off-grid. In some cases you're creating a microgrid around the data center. And that equals at that time the power opportunity and solar is the fastest power and it is the most economical from that standpoint. So that's kind of the value prop that we provide to our customers. Today a lot of the hyperscalers are making investments in procuring the chips. In some cases they built out the facilities. They don't have power. We can give them power. We can give it the fastest. We can either grid connect or we can do off-grid. Those are all degrees of freedom that enable options to our customers to think and optimize around.

I think what I really like about when we started getting in newer members that understand the art of the possible. Unfortunately, I think in some cases we still have members that are somewhat close-minded and they've seen what happened in the past and they've seen the evolution of our industrialization and people kind of get the point that I feel like what we lost we can't get it back. And that just frustrates me because that couldn't be further from the truth. And it goes back to my comment before about it starts with a commitment. And once you make that commitment, the American worker is strong. The American worker is innovative. The American worker is passionate. If you can take leaders and have them run companies that have a strategic lens towards that type of commitment, sometimes unfortunately companies are run just on a simple return on investment decision that governs everybody's mindset. And nobody thinks through the long-term strategic implications of the value creation that we can create by doing things here and the long-term independence that we get by controlling the supply chain. So I think that's part of it. And I think the other piece of it is I'll go to mining and refining as an example. If anyone thinks that, first of all, it's actually a critical strategic need. We need to have the mining capabilities and the refining capabilities. We need to keep the rare earths critical minerals here in the US. They shouldn't be going over to China and allowing them to control that portion of the supply chain. But anyone thinks that it's being done in some environmentally friendly way or not using forced labor or whatever it is in China, they're foolish. And we know if we do things like that here in the US, we'll do it the right way. We'll create those strategic components of our supply chain, that ecosystem that will allow us to compete and allow us to thrive for centuries to come. If we choose to ignore it today and we aren't willing to make those commitments, future generations, the vulnerabilities that they will face because we no longer have basic capabilities to build the next ladder up, the basic supply chains in order to make investments that need to be made in doing things here in the US. And once you've let it go, like just on the crystalline silicon side, it's really hard to get it back. So we can't be vulnerable. We got to be committed today. We got to look across the horizon. We got to look at what we need to do 5, 10, 15 years from now. We can't keep having every couple of years new administrations come in and then there's a political wood saw that goes back and forth. We need to stay true to the strategy that we can invest around and be committed to looking at what's the best interest for the United States, not just for the next 4 years, but over the next 4 decades.

Yeah, that's a tough one to pick the one policy, but I would say the policy has to be the closest we should be getting out of the way. Get government out of the way and allow the investments to be made here in the US. And we'll do the right thing. It's kind of like even on some processes that you'll see in certain regional territories like in the Northeast where there's this long interconnection queue process that has to happen in order to connect to the grid. Texas is kind of like saying, 'Hey, go ahead and connect.' Just go ahead and do it. And then if there's an issue around it, we'll let you know. So they're trying to step back and allow it to happen. In some of the regions it's very bureaucratic and they want to do 5, 6, 7 years of interconnection studies before they determine whether you can connect at all. And that's just a waste of time and bureaucracy which generally doesn't add any value and it just slows things down. And we just need to go. So if I had any one wish, government step back, allow companies to invest, allow them to make the investments they need to and generally companies and corporations are well-intended. They'll do the right thing. And as long as they're doing it and they're creating economic prosperity, creating jobs here in the US, as long as they're not moving jobs offshore, let them go do it. Do the right thing. Invest in America. That would be my high-level theme. How do we tie it to one policy? Well, we'll debate that one, but more or less get out of the way.