Intel entered the burgeoning clean-tech sector on Monday by creating SpectraWatt, a spinoff company that will manufacture solar cells, following IBM's latest foray into solar technology.

Its investment arm, Intel Capital, is leading a US$50 million round in SpectraWatt. Other investors include Goldman Sachs subsidiary Cogentrix Energy, PCG Clean Energy and Technology Fund, and German solar company Solon.

The venture expects to start breaking ground on a facility in the middle of this year in the US state of Oregon and start shipping cells made from silicon to solar panel makers by the middle of next year. Andrew Wilson, the former general manager in the Intel New Business Initiatives group, will be SpectraWatt's CEO.

Wilson declined to provide specific technical information because the company is still in the process of seeking intellectual property protections.

He noted that the company will focus on improving solar cell efficiency — how well a panel converts light to electricity — as well as cutting the overall cost per watt.

"The solar industry is akin to where the microprocessor industry was in the late 1970s. There is a lot to be figured out and improved," he said.

Wilson said that the company has already secured customers and a supply of polysilicon, which is now in short supply worldwide.

Solar expert Travis Bradford, who is president of the Prometheus Institute, said that Intel's move into solar is not surprising, given the rapid growth of solar energy.

"Almost every company in the electronics and semiconductor industry is going to try to figure out how to get into solar — it's going to be that big of an industry," he said.

Meanwhile, IBM announced a deal yesterday with a Japanese semiconductor equipment manufacturer to make thin-film solar cells from CIGS — a combination of copper, indium, gallium and selenide.

Neither IBM nor its partner, Tokyo Ohka Kogyo (TOK), plan to manufacture cells themselves. Rather, they will develop technology that can be licensed to solar companies in two or three years, said Supratik Guha, lead scientist for photovoltaics at IBM Research.

IBM has already built a prototype device. Once made at large volumes on a glass substrate, the cells are expected to deliver electricity at less than one dollar per watt at peak times â€" a long-held target of many solar outfits.

"We have the skills that we have developed in other areas â€" standard silicon semiconductors, materials chemistry â€" and we're looking to utilise those skills in the photovoltaic space and develop IP [intellectual property] and know-how that other people don't have," Guha said.

Traditional solar cells are made from silicon, but alternative thin-film materials are becoming a larger share of the market. Thin-film cells are less efficient at converting sunlight to electricity than silicon, but they require much less material to produce a cell, making them cost-competitive. Solar high-flier First Solar sells thin-film cells from cadmium telluride.

"CIGS will be the big story of 2009 because we know how many companies are putting in multimegawatts of CIGS [production capacity] in 2009," predicted solar expert Travis Bradford, president of the Prometheus Institute, who spoke at a recent Greentech Media solar briefing.