The first three posts in this series described how Dr. Richard Swanson started SunPower, how T.J. Rodgers forever changed SunPower’s future, and how Cypress production processes helped SunPower combine innovative technology with low-cost, high-volume production to transform the solar industry. The final post illustrates the results of these events.
Creating $7.6 Billion of Shareholder Value
SunPower began commercialization of its high-efficiency solar panels in 2004. Revenue quickly grew from $10.9 million to $78.8 million in 2005 and to $236.5 million in 2006. In November 2005, the company went public on the NASDAQ stock exchange. Cypress had invested a total of $143 million in SunPower. It sold SunPower stock for $677 million in cash between the time of the IPO and until it distributed $2.52 billion in its remaining SunPower shares to Cypress shareholders in November 2008. In total, Cypress shareholders realized a 22X gain on the initial investment in 6 years.
Following is a list of milestones and a graph of key metrics achieved over this period.
2001 – SunPower solar panels outperform competitors by 50%, but the company cannot scale production and is on the verge of laying off 50% of its workforce.
2002 – T.J. Rodgers personally finances SunPower until Cypress Semiconductor acquires it and begins to deploy its semiconductor production techniques and business processes.
2003 – Cypress Semiconductor helps SunPower adapt production techniques and install business processes to significantly reduce cost and increase volume.
2004 – The solar industry’s first high-volume, low-cost, high-efficiency cell production facility, Fab 1 in the Philippines capable of 110 MW output, begins production and commercialization.
2005 – SunPower’s IPO on the NASDAQ stock exchange in November opens at $18.00 per share, immediately jumps to $25.45, and rises to $34.75 before year end.
2006 & 2007 – As SunPower production volume, revenue, share price and market cap continue to rise sharply, Cypress sells $677 million of its shares.
2008 – SunPower market cap reaches $7.6 billion, and Cypress distributes its remaining shares worth $2.52 billion to shareholders—a 22X total gain of $3.197 billion on a $143 million investment.
The SunPower story has special significance for us. In 2012, T.J. Rodgers convinced the Cypress Semiconductor board of directors to provide strategic funding to Enovix, and he has served on our board of directors since then. Over this period, we have adopted the same production and business processes for our 3D Siliconä Lithium-ion Battery that SunPower used for its high-performance solar cells. According to T.J., “Enovix has the ability to transform the battery industry in the same way SunPower has transformed the solar power industry.”